Gift from my husband

[houston87]

What is the name of your state? Nevada
My husband gifted me 35K currency during 2014. Now I wish to deposit 30K of that in my personal bank account to use for my living as my relations with my husband are not good; he was taking care of all my financial needs all these years but no longer. I have no income on my own all these years and was taking care of our children and home.

I learned that IRS may investigate for bank cash deposits exceeding 10K. My husband, although, not in good terms with me, was kind enough and give me a notarized letter a week ago confirming that 35K cash gift he gave in 2014. He said he has no bank statements for that cash withdrawal in 2014 (the bank keeps for max 6 years). He has been reporting around 70K income every year for many years including 2014.

(A). Whether this notarized affidavit of my husband will protect me if IRS investigates my 30K cash deposit in bank?

(B). Whether the IRS may go after my husband also, for the source of that 25K in 2014, once IRS saw that notarized affidavit (of my husband) from me? If so, whether the copies of his IRS tax returns (70K per year income) will protect him from IRS about that 35K cash he gifted me in 2014 (I am concerned of my husband who generously gave this notarized letter, although we both are not in good relation otherwise. I have moral obligation to do not push him into fire hence I am concerned of him).

I saw this forum is providing invaluable suggestions. Sincerely hope I will get advice on my specific situation.

 

[Taxing Matters]

What will happen when you make that cash deposit is that the bank will submit a currency transaction report (CTR) to the U.S. Treasury's FinCEN division, which is then shared with IRS. When you file your 2022 return next year the IRS will match your return against all the various income reporting documents it gets, including the CTR. When it doesn't find anything on the return that accounts for the cash deposit shown on the CTR the IRS computer will spit out a letter to you asking you to explain why it was not included in income. You'd respond that the money was a gift from your husband and provide the notarized affidavit. That may well settle the matter. But there are no guarantees on that as I've not seen the explanation you'd provide or the affidavit and it will depend on whether the IRS personnel reviewing your response will feel it is sufficient.

 

[LdiJ]

I agree with Taxing Matters and I will say that your worst case scenario would be that the IRS would decide that the money was income and you would have to pay tax on it (along with some interest and penalties).

Personally, I don't think that there is much chance of that. Gifts between spouses are very normal and expected. You should not let it scare you from putting the money in the bank.

 

[houston87]

Sooo… many thanks. To avoid this CTR, what if I deposit less than 10K in multiple bank accounts on my name? Will this violate any law? Will this create any additional suspicions for IRS (and create further issues for me) once IRS starts its investigation, even though I provide to IRS the notarized letter from my husband?

 

[doucar]

If they find out it will make them more suspicious than one single deposit because it will look like exactly what it was, an attempt to avoid the reporting law.

 

[Zigner]

Sooo… many thanks. To avoid this CTR, what if I deposit less than 10K in multiple bank accounts on my name? Will this violate any law? Will this create any additional suspicions for IRS (and create further issues for me) once IRS starts its investigation, even though I provide to IRS the notarized letter from my husband?

Making deposits in different institutions can be legal in certain situations. For example, I have multiple banks, with each serving a different purpose (one for my Christmas fund, one for savings, one I use to pay my bills, and one I use for my day-to-day spending). If I were to have $36k and put $9k in each, that is perfectly legal, although I might need to prove my intent at some point in the future.

That is not, however, what you are proposing. Structuring your deposits as a way to avoid the reporting requirements is illegal.

 

[adjusterjack]

my relations with my husband are not good; he was taking care of all my financial needs all these years but no longer. I have no income on my own all these years and was taking care of our children and home.

Then consider divorce sooner than later as you may be entitled to spousal support or, at least, a community property settlement.

I saw this forum is providing invaluable suggestions. Sincerely hope I will get advice on my specific situation.

Use credit cards for as many of your expenses as you can. Pay the credit card bills with money orders. Conserve the cash.

 

[adjusterjack]

When it doesn't find anything on the return that accounts for the cash deposit shown on the CTR the IRS computer will spit out a letter to you asking you to explain why it was not included in income.

I have deposited large cash amounts in my checking accounts on several occasions in the past few years and never got a letter.

Is the IRS tightening that up lately?

I just put $20k into my account from a cash sale of my car.

 

[Zigner]

Pay the credit card bills with money orders. Conserve the cash.

She'd presumably be using the cash to buy the money orders

 

[adjusterjack]

She'd presumably be using the cash to buy the money orders

Or just pay cash for everything except online orders.

I used to pay cash for everything until I discovered cash reward credit cards with sign up bonuses. Now I use them for just about everything and pay the bill in full each month while I watch the rewards grow a little at a time. It's chump change, I know, but it's good for a couple of hundred a year and it amuses me that the banks pay me to use the cards.

 

[LdiJ]

I have deposited large cash amounts in my checking accounts on several occasions in the past few years and never got a letter.

Is the IRS tightening that up lately?

I just put $20k into my account from a cash sale of my car.

No, the IRS is not tightening up lately. There is no guarantee that the IRS will or will not send a letter regarding a big deposit into the OP's bank account. It could go either way. However, the OP is being a bit paranoid about the whole thing. It was a gift from her husband. It could even potentially be considered a marital settlement.

 

[houston87]

Use credit cards for as many of your expenses as you can. Pay the credit card bills with money orders. Conserve the cash.

Many many thanks for everyone.

IRS website https://www.irs.gov/newsroom/understand-how-to-report-large-cash-transactions conveys

"Note that money orders and cashiers checks under $10,000, when used in combination with other forms of cash for a single transaction that exceeds $10,000, is defined as cash for Form 8300 reporting purposes."

and

"A person must file Form 8300 if they receive cash of more than $10,000 from the same payer or agent:

• In one lump sum.
• In two or more related payments within 24 hours. For example, a 24-hour period is 11 a.m. Tuesday to 11 a.m. Wednesday.
• As part of a single transaction or two or more related transactions within a 12 month period."

If I am paying my monthly credit card bills with money orders (bought using cash), then whether the bank should report this matter to IRS (once the sum of these amounts, within 12 months, exceeds 10K?). Will these credit card bill payments be treated as “As part of a single transaction or two or more related transactions within a 12 month period” IRS is referring to?

 

[LdiJ]

Many many thanks for everyone.

IRS website https://www.irs.gov/newsroom/understand-how-to-report-large-cash-transactions conveys

"Note that money orders and cashiers checks under $10,000, when used in combination with other forms of cash for a single transaction that exceeds $10,000, is defined as cash for Form 8300 reporting purposes."

and

"A person must file Form 8300 if they receive cash of more than $10,000 from the same payer or agent:

• In one lump sum.
• In two or more related payments within 24 hours. For example, a 24-hour period is 11 a.m. Tuesday to 11 a.m. Wednesday.
• As part of a single transaction or two or more related transactions within a 12 month period."

If I am paying my monthly credit card bills with money orders (bought using cash), then whether the bank should report this matter to IRS (once the sum of these amounts, within 12 months, exceeds 10K?). Will these credit card bill payments be treated as “As part of a single transaction or two or more related transactions within a 12 month period” IRS is referring to?

Just deposit the money into your bank account and be done with it! You have documentation of where you got the money. You are being far too paranoid.

 

[houston87]

Sincere thanks, will do.

For gaining knowledge,

If I am paying my monthly credit card bills with money orders (bought using cash), then whether the bank should report this matter to IRS (once the sum of these amounts, within 12 months, exceeds 10K?). Will these credit card bill payments be treated as “As part of a single transaction or two or more related transactions within a 12 month period” IRS is referring to at RS website https://www.irs.gov/newsroom/understand-how-to-report-large-cash-transactions ?

 

[doucar]

Your not going to get any different answers by asking us to speculate. Just deposit the money and forget about it,