Yes, a US person (resident, citizen or a green card holder) can definitely receive gifts from a foreign person, say from his relatives in India. A general rule is that , a foreign gift (money or other property received) received by a U.S. person is excluded from his gross income. However, a gift to a U.S. person does not include amounts paid for qualified tuition or medical payments made on behalf of the U.S. person.
Reporting requirements:
Although this amount is excluded from the gross income, you need to file Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, if, during the current tax year, the gift exceeds a certain amount. Include on Form 3520:
- Gifts or bequests valued at more than $100,000 from a nonresident alien individual or foreign estate (including foreign persons related to that nonresident alien individual or foreign estate);
- Gifts valued at more than $15,601 for 2015 (adjusted annually for inflation) from foreign corporations or foreign partnerships (including foreign persons related to the foreign corporations or foreign partnerships).
These are to be reported in Part IV of Form 3520.
You also need to aggregate gifts received from related parties. For example, if you receive $60,000 from nonresident alien A and $50,000 from nonresident alien B, and you know or have reason to know they are related, you must report the gifts because the total is more than $100,000.
File Form 3520 needs to be filed separately from your income tax return. The due date for filing Form 3520 is the same as the due date for filing your annual income tax return, including extensions.
Where to File Form 3520
Mail Form 3520 to the following address:
Internal Revenue Service Center
P.O. Box 409101
Ogden, Utah 84409
Please note that gifts from foreign trusts are subject to different rules than gifts other foreign persons.
