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Form 3520: gifts and inheritances from family abroad.

Money from parents in India is usually not taxed in the U.S. But once gifts from abroad pass $100,000 in a year, they have to be reported on Form 3520, and the penalty for missing it is a percentage of the gift itself.

Who files

Reporting a gift is not paying tax on it.

Gifts from family abroad

More than $100,000 in a tax year from nonresident alien individuals. Gifts from related people, such as both parents, are added together.

Inheritances

A bequest from a foreign estate counts toward the same $100,000 test.

Gifts from foreign companies

A much lower threshold, about $20,000 for 2025 and adjusted each year, applies to gifts from foreign corporations or partnerships.

What is taxed

Not the gift. Interest, dividends or gains the money earns after it reaches you are taxed as usual.

Dates and penalties

A separate filing, with its own penalty.

Due with your return: April 15 for calendar-year filers, or October 15 if you extended your income tax return
Form 3520 is its own filing, not a schedule inside your Form 1040
Missing it costs 5% of the unreported gift for each month it is late, up to 25%
The penalty can be avoided where there was reasonable cause, so missed years are worth fixing deliberately rather than ignoring
If the money first sits in an Indian account in your name, that account may also need an FBAR

An example (figures made up)

Your father sends $60,000 in March and your mother $50,000 in October toward a home down payment. Each gift is under $100,000, but gifts from related people are added together: $110,000, so you file Form 3520 with your return. No U.S. tax is due on the $110,000. The interest it earns in your savings account is taxed as normal.

FAQ

Questions we get every week

Do I pay U.S. tax on money my parents send from India?

No U.S. tax on the gift itself. You report it on Form 3520 if gifts from foreign individuals total more than $100,000 in the year.

Do gifts from both parents count together?

Yes. Gifts from related foreign persons are added together when testing the $100,000 threshold.

What if my parent is a U.S. citizen or green card holder?

Then it is not a foreign gift and Form 3520 does not apply. A large gift from a U.S. person is reported by the giver on Form 709, not by you.

When is Form 3520 due?

With your income tax return: April 15 for most people, or October 15 if you extended your return.

I missed Form 3520 for an earlier year. What now?

The penalty can reach 25% of the gift, but it can be avoided where there was reasonable cause. Talk to a CPA before filing late so the explanation is made properly.

General information, not advice for your situation. Figures checked October 2026. See also NRI and Indian-American tax.

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