I will be receiving approximately $100,000 USD in cash as a gift from
my relatives in Vietnam. Upon entering the United States (I am a U.S.
citizen), do I need to pay taxes on this gift?

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Request for Question Clarification by pafalafa-ga on 28 Nov 2005 02:00 PST

Nice gift.

I don't know about taxes, but if you are seriously considering
carrying a large wad of cash through Customs, you will have to declare
it at Customs, and be prepared to explain it.  Make sure you check
into the requirements well before your actual trip.

Beyond that, it seems to me its income, plain and simple, and would
have to included as such on your income tax returns.

Do you have reason to suppose there's an at-the-border payment that takes place?

pafalafa-ga

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Clarification of Question by docholliday-ga on 28 Nov 2005 03:38 PST

From the IRS documents I have read regarding cash gifts, the
beneficiary does not have to pay any taxes. As far as customs is
concerned, they require the traveler to disclose the cash amount for
income tax purposes. Since I am not an accountant or tax expert, I
would like a 'tax expert' to validate my readings.

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Request for Question Clarification by pafalafa-ga on 28 Nov 2005 05:19 PST

Just an FYI:


http://www.customs.ustreas.gov/xp/cgov/travel/vacation/kbyg/money.xml

Greetings,
From the answer to the following question, it seems that you have
understood correctly.

http://answers.google.com/answers/threadview?id=540952

OF course, this is not legal or professional advice (see the disclaimer below).

I expect that by "cash" you do not mean a bundle of bank notes but a
cash amount in the form of a bank check or bank transfer.

Hi:

When I say 'cash', I mean it in the literal sense. In other words, I
will be carrying 1000 Benjamin Franklins.

Hmm, I think you should also look into the Vietnamese regulations on
taking foreign currency from the country.  Here are several sites
about Vietnam, but perhaps you already are aware of the restrictions
there.

http://www.vietnamembassy-usa.org/news/story.php?d=20051020125707
http://www.dpi.hochiminhcity.gov.vn/invest/html/law1-2.html
http://www02.tiglion.net/scripts/travdb/currency/exe/curr.asp?country=VN
http://destinia.com/guide/the-world/asia/vietnam/1-30002-30236/4/en
http://www.travel.com.hk/currency/curr_v.htm

The following is just some personal thoughts on the matter  - no expert opinion:
Since transporting large amounts of cash is always suspect, although
no taxes are due, US Customs may be interested in seeing documentation
for the source of the funds as gifts and maybe also documentation of
approval for the export from Vietnam.
There is also the possible problem of counterfeit notes ...

Customs concerns aside, unless your relatives have paid US federal
taxes on that amount, it is most certainly taxable income to you under
the Internal Revenue Code, section 61.  Additionally, under IRC
Section 6039F, a large gift from foreign persons have to be specially
reported.

Taco,
I beg to differ;  according the the answer to question 540952 (and a
couple of others) a gift or inheritance from someone who is not
subject to US tax is not taxed in the US.
Myoarin

http://www4.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00006039---F000-.html

you gotta report it, and pay tax.

From that link:  you gotta report it  OR  pay tax.

what do you think the IRS is going to do when you report it?  say "oh
ok, thanks for letting us know"?  they will tax it.  it will be
considered gross income which is defined as "all income from whatever
source derived" Sec. 61.  If you know anything about federal income
tax, you will know they will tax all and any income, unless it's
already been taxed.

Taco,
We are just demonstrating that professional advice is required.  Gifts
and inheritances are not income for US taxpayers if they come from US
sources, since the relative tax is due from the source.  I believe
that the same is true for gifts from a foreign source, except that the
IRS has no claim on the donor.
THis site seems to apply:
http://www.taxprophet.com/foreign/forgift.html
click on the blue term.  Nothing about tax due, only about what
happens is the amount is not reported.

BUT docholliday-ga, please note that the amount is expressed as
"$100,000 or more".  You should recieve less than $100,000.
BUT also please note that you should secure a professional opinion on the matter.

Good luck, Myoarin