Cash gift from visiting relative

[huaiwin]

What is the name of your state? New York

I am an international student. My relative from Taiwan gave me $5000 cash when she visited USA and I deposited in my bank account. I have her email to prove that she gave me that money as gift. A friend informed that IRS may send a memo to me and I must be prepared for that. Will that email be enough to give to IRS if it contacts me?

 

[Ohiogal]

Look at this thread: https://forum.freeadvice.com/threads/cash-gift-from-visiting-relatives.661508/

 

[Taxing Matters]

What is the name of your state? New York

I am an international student. My relative from Taiwan gave me $5000 cash when she visited USA and I deposited in my bank account.

The bank is only required to report that cash deposit to the IRS or Treasury if (1) the amount of the deposit was $10,000 or more either in a single deposit or series of related deposits or (2) there was something suspicious about the deposit given what the bank knows about you. Your deposit was under $10,000 so it is very unlikely that the bank is going to report this deposit, assuming that you weren't also making other cash deposits around the same time.

Will that email be enough to give to IRS if it contacts me?

It might be. I haven't seen the e-mail to get a sense of whether it might be sufficient. The issue would be whether the IRS would see that money as possible income to you. As an "international student" if you are not a resident for tax purposes it would be harder for the IRS to make the case that the cash you had was US source income subject to tax in the US.

Again, though, it is very unlikely the bank is even going to report this. So if I were you, I'd not be worrying about this.

 

[PayrollHRGuy]

It is not unusual for college students to have large cash deposits from family members. The IRS doesn't have the manpower to investigate all of them even if they limited it to international students.

 

[zddoodah]

A friend informed that IRS may send a memo to me and I must be prepared for that.

And what are your friend's qualifications to make you think he/she knows what he/she is talking about? Did your friend explain what this "memo" might say?

Will that email be enough to give to IRS if it contacts me?

You mean the email that no one here has ever read or seen?

 

[davew9128]

Stop taking tax advice from friends.

 

[huaiwin]

I greatly appreciate all the advice given. The email contains my relative’s name, and address in Taiwan and in which she wrote that she visited US during … period and gave me $5000 cash gift.

Also, my parents sent me $9,000 cash by mail (Fedex) in January 2021 when I was in real financial trouble paying my fee and other necessities. They sent a letter (with their hand signature and date) along with that cash stating that it is a gift to me. I deposited the cash in bank then paid my fee and other necessities from that. I read https://help.cbp.gov/s/article/Article-641?language=en_US (shipping/mailing currency or other monetary instruments to the United States or to a foreign country) but sincerely request your output on whether that letter would be enough if IRS asks me about that $9000.

 

[Zigner]

Sending cash by FedEx (which is NOT "mail") is an extremely foolish thing to do. The letter is worth less than the paper it's written on. The email for the current transaction is even more meaningless because of how easy it is to spoof emails. Having said that, the chances that these two transactions will trigger any reporting is are very low. I wouldn't worry too much about it now, but do keep your "evidence" for the nature of these "gifts". It can't hurt...

 

[davew9128]

There must be something in the water to cause all this paranoia lately. I deal with non-US reporting...a LOT...and generally the concern is "how do we get away with XXXX" not "OMG THE IRS IS GONNA SEND ME TO PRISON FOR GETTING CASH FROM GRANNY LEE".

 

[zddoodah]

greatly appreciate all the advice given. The email contains my relative’s name, and address in Taiwan and in which she wrote that she visited US during … period and gave me $5000 cash gift.

Also, my parents sent me $9,000 cash by mail (Fedex) in January 2021 when I was in real financial trouble paying my fee and other necessities. They sent a letter (with their hand signature and date) along with that cash stating that it is a gift to me. I deposited the cash in bank then paid my fee and other necessities from that. I read https://help.cbp.gov/s/article/Article-641?language=en_US (shipping/mailing currency or other monetary instruments to the United States or to a foreign country) but sincerely request your output on whether that letter would be enough if IRS asks me about that $9000.

Since you seem to have deposited all of this cash into a bank account, it seems you don't have any concerns about using banks. Why do your relatives seemingly not feel the same? You should tell your relatives that, in the future, they should not be sending you cash -- especially via a service like Fedex, which prohibits sending cash. There are any number of reliable and safe ways to send that kind of money.

The letter is worth less than the paper it's written on. The email for the current transaction is even more meaningless because of how easy it is to spoof emails.

It's no easier to spoof an email than it is to spoof a letter, so I'm not sure why you think the email is less meaningful. In fact, an email can be more meaningful because it leaves an electronic trail. Letters and emails are used as evidence in courts every day, so why wouldn't they be valid here (subject to what they say, of course)?

the chances that these two transactions will trigger any reporting is are very low.

Not based on what "Taxing Matters" wrote above:

The bank is . . . required to report that cash deposit to the IRS or Treasury if (1) the amount of the deposit was $10,000 or more either in a single deposit or series of related deposits

We now have two deposits totaling well over $10k. While the OP didn't indicate when the $5k deposit was made, I got the impression it happened in the last six months or so.

 

[Taxing Matters]

Sending cash by FedEx (which is NOT "mail") is an extremely foolish thing to do. The letter is worth less than the paper it's written on. The email for the current transaction is even more meaningless because of how easy it is to spoof emails.

As a former lawyer for the IRS, I disagree. They are not "worthless". They can, in fact, be useful when done right. It's certainly better than having nothing to support the gift.

There must be something in the water to cause all this paranoia lately.

That's my thought, too. Something happened here to spark the concern. In the circumstances described by the OP this is not a big deal for him/her to worry about. Unless something significant has been left out, I wonder what caused this to become a major worry?

 

[Zigner]

It's no easier to spoof an email than it is to spoof a letter, so I'm not sure why you think the email is less meaningful. In fact, an email can be more meaningful because it leaves an electronic trail. Letters and emails are used as evidence in courts every day, so why wouldn't they be valid here (subject to what they say, of course)?

I believe that it's easier to show (and convince someone) that a letter is "real" vs an email. I am not disputing the fact that either can be (and are) used as evidence in court when adequately authenticated, and other objections (if made) are overcome.

We now have two deposits totaling well over $10k. While the OP didn't indicate when the $5k deposit was made, I got the impression it happened in the last six months or so.

Based on the amount alone, a deposit of $9,000 in January and a deposit of $5,000 in July (as an example) won't trigger a reporting requirement. I concede that it's possible that someone at the bank may get "suspicious" about the nature of the funds and report it even without the amount triggering such a requirement. I also concede that we don't know the actual timing of the deposits and I was basing my answer on an assumption that was premature.

 

[Taxing Matters]

We now have two deposits totaling well over $10k. While the OP didn't indicate when the $5k deposit was made, I got the impression it happened in the last six months or so.

The two deposits appear to be months apart, and thus wouldn't trigger a currency transaction report (CTR) from most banks unless the bank had reason to think them related. I wouldn't say it would never happen, but it's pretty unlikely if these two deposits are all there is.

 

[Zigner]

As a former lawyer for the IRS, I disagree. They are not "worthless". They can, in fact, be useful when done right. It's certainly better than having nothing to support the gift.

Fair enough. In my own (now weak) defense, I did suggest that the OP hang on to the letter and email because it can't hurt.

 

[huaiwin]

My relative gave me cash in March 2021, and my parents sent $9000 in January 2021 and I deposited both as soon as I receive each of them. It is possible the bank noticed the total sum is more than $10,000 as I am using a small local bank here. My parents sent me $9,000 cash by Fedex although FedEx does not accept cash, will it create any further issue to me?