Do you get taxed when you bring in to the US, currency in excess of $10,000?

Question

When you return to the US from a trip abroad you must declare currency in excess of $10,000. Is that so they can tax you on the excess? A European relative left me $25,000 in cash. If I use banks to do a wire transfer, they rob you with exorbitant fees. The declaration form says that citizens have the right to bring back any amount of money into the country but you must declare anything over $10,000. Is that so they may tax you? As much as I love to travel to Europe, I do not feel like making 3 trips just to bring back my money.

Answer 1

Yeah, it's so they can tax you.

You might save money by transferring it before entering the country...

Answer 2

There is no tax on currency brought into the country.  IRS may question where it came from. Smuggling it in undeclared can get you in very hot water.

Answer 3

That is a bummer ,

Mail the money to yourself in several smaller amounts, using your relitives name as the sender and your u.S address as the return address. and a brown envelope. That is one way that a forein national I know does it ,as told to me

Answer 4

If you carry, ship, or cause to be shipped cash or negotiable securities in excess of $10,000 in the aggregate you are required to file FinCEN Form 105 to report the activity.  The principal purpose is for the investigation and prevention of financial crimes.  (FinCEN stands for Financial Crime Enforcement Network.)  The form is filed with US Customs and is due within 15 days of the money transfer.  Customs MAY share the information with the IRS so you should be prepared to explain the source of the funds.

In addition to that filing requirement, if you have signatory authority over one or more foreign bank, investment, or other financial accounts with an aggregate value in excess of $10,000 at ANY time during the year you are required to file Form TD F 90-22.1 with the US Treasury Department.  The primary purpose of the report is law enforcement and crime prevention.  This report goes direct to the Treasury Department and the IRS is the lead agency on collection of this information in fact.  Again, you may need to be able to substantiate the source of the funds if questions are asked.

Since this is an inheritance, no US taxes are due on it.  Ditto if it is a bona fide gift.  If it's a gift and your relative is a US citizen or legal permanent resident, THEY may have to file a US Gift Tax return.  If they are not a resident or citizen, they cannot be compelled to file a US Gift Tax return.

Lastly, if the source of the funds is a foreign trust you may need to file a Form 3520 return directly with the IRS.  That return is also due for foreign gifts that exceed $100k.  The trust amounts are much lower, on the order of $15k or so, but there's no risk in filing the return if it's not actually required.  The primary purpose of this return is to determine if the funds are taxable income to you.

No taxes are due with any of the above reports or returns, however the penalties for failure to file are SEVERE.

If you do the international wire transfer you can skip the FinCEN 105 report.  The banks will handle any required reports.  You still would need to file the Form TD F 90-22.1 since you did have signatory authority over the funds in a foreign bank, even if it was only long enough to effect the wire transfer.  And if the funds came from a foreign trust, you'd still need to file the Form 3520 return.

And just an observation.  The cost of the wire transfer will be a lot less than a single round trip to Europe.  Now if you need an excuse to go to Europe then by all means go and enjoy yourself.  (I lived in Europe for over 10 years and go back as often as I can.  I'm always looking for an excuse.)  Just be sure to bring the funds back in the form of a check payable in US funds and drawn on a US bank.  All major European banks have US subsidiaries, branches, or partners who can issue such a check that will clear through the the Federal Reserve System.  Don't even THINK of carrying that much cash!

Answer 5

no, it isn't so they can tax you, it's because they are looking for mules and money launderers.

Answer 6

Yes, you must declare it. You will not pay any tax, but you may have to declare source of your income.

If it is a gift from a relative, no problem. If the relative is U.S. person, he/she must file gift tax return.

http://taxipay.blogspot.com/2008/03/us-g...