Legal Question in Tax Law in Massachusetts
I am in the state of Massachusetts. My parents live overseas. If they want to wire me a large sum of money (say, 200,000USD). Do I need to pay income tax on this? If so, is there a legal way to get around?
1 Answer from Attorneys
I assume this is a gift or a loan. If a loan document it. If a gift, get an email confirming it is a gift.
If your parents are not US Citizens nor are US Residents (Green Card), then there is no tax whatsoever.
If your parents are US citizens, they need to file a gift tax return with their tax returns for next year. If they are not US citizens or have a Green Card as a US resident, they do not need to file such a return.
US exempts $13,000 per parent for annual gifts and allows tax credits up to $1 Million in gifts per person.
None of this applies to non-US residents or Citizens.
If the payment is for services whether rendered in the US or not and you are a US Resident (temporary or not) allowed to work in the US, then the payment is subject to US income tax.
I would assume the funds are a gift and your parents are not US Citizens nor US Residents for tax purposes, so there is no tax on the $200K.
If you have any more questions on this matter, please feel free to call me.
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