Parents sent money from China: is it taxed, and what do you file?

It is one of the most common money questions in Chinese immigrant families: your parents wired you money for a down payment, a car, or just to help out. Do you owe tax on it? Usually not. Do you have to tell the IRS? Sometimes, and the penalty for not doing so is large.

The short answer

• No income tax. A gift is not income to you. You do not put it on Form 1040.
• No gift tax for your parents in the U.S. U.S. gift tax falls on the giver, and a nonresident alien giving cash from abroad is outside it.
• A report above $100,000. If you are a U.S. person and foreign individuals gave you more than $100,000 in one tax year, you file Form 3520, Part IV. It is an information return: no tax, no payment, just disclosure.

Does this apply to you?

You file only if you were a U.S. person for the year: a citizen, a green card holder, or a resident under the substantial presence test. Students on F-1 or J-1 visas are usually nonresidents for their first five calendar years, so gifts received in those years are normally not reported.

The giver matters too. Form 3520 Part IV covers gifts from nonresident alien individuals and foreign estates (and, at a lower threshold, foreign companies). If your parents are themselves U.S. citizens or green card holders, their gifts are not reported on Form 3520, even if they live in China.

How the $100,000 adds up

The test is per tax year, and gifts from related people are combined. Related here means your parents, grandparents, siblings, spouse and children, so Mom and Dad count as one donor. For example, for 2025:

Date	From	Amount (USD at the date received)
March	Mother, wire from China	$45,000
April	Father, wire from China	$45,000
June	Grandmother, for closing	$15,000
2025	Total, related persons	$105,000: file Form 3520

Aunts, uncles and cousins are not "related" under this rule, so their gifts are tested separately. But substance wins. Chinese foreign exchange rules give each person an annual purchase quota of USD 50,000, so families often ask several relatives or friends to send part of the money. If those people are really passing on your parents' money, the IRS treats your parents as the donors, and line 56 of the form asks whether any donor was acting for someone else. Chinese rules on splitting purchases across people are a separate question for your bank.

What counts as a gift

• Wires and cash transfers into your U.S. or Chinese account.
• Money your parents pay on your behalf, such as a down payment sent straight to escrow.
• Property put into your name, such as an apartment in China, at its fair market value when you received it.
• Inheritances, which Part IV calls bequests.

A genuine loan is not a gift. A "loan" with no written terms that is never repaid looks like a gift, so if your family means it as a loan, write it down and keep the repayment records.

Deadline and penalty

Form 3520 is due on the same date as your income tax return, including extensions, and is mailed separately to the IRS in Ogden, Utah. It cannot be e-filed. Missing it costs 5% of the gift for each month late, up to 25%: on a $200,000 gift, as much as $50,000. Since October 2024 the IRS reads a reasonable cause statement attached to a late form before deciding on a penalty.

If the money stays in China

The gift is one question; where the money sits is another.

• FBAR: if all your accounts outside the U.S. together peaked above $10,000 during the year, you file FinCEN Form 114 online. A Chinese savings account in your name holding your parents' gift counts.
• Form 8938: above $50,000 at year end or $75,000 at any time (single, living in the U.S.), attached to your return.
• Interest the money earns after it becomes yours is taxable income on Form 1040.

See FBAR vs Form 8938 vs Form 3520 for how the three fit together, and FBAR rules for Chinese bank accounts, Alipay and WeChat Pay for which accounts in China count.

What to keep

The IRS does not want bank statements with Form 3520, and it does not require a gift letter. Keep the wire confirmations and a note of who sent what, and when, for at least six years. Your mortgage lender will probably ask for a gift letter anyway.

Next steps

1. Run the free Form 3520 checker: five questions on your residency, who gave the money, and the total.
2. If you need to file, the Form 3520 wizard for foreign gifts builds the line 54 gift table, works out your due date, and gives you the form with a cover letter and Ogden mailing guide.
3. Want to read the form first? See Form 3520 instructions in plain English.

Self-prepared information return. Not tax or legal advice. Not affiliated with the IRS. Source: Instructions for Form 3520; verify thresholds for the current year.