Form 3520, and the two thresholds that are not the same number
A gift from a foreign individual is reportable above $100,000. A gift from a foreign company or partnership is reportable above $20,573 for tax year 2026, because that one is indexed and the other is not.
Form 3520 reports gifts and bequests from foreign persons above $100,000 where the donor is a nonresident alien individual or a foreign estate, and above $20,573 for tax year 2026 where the donor is a foreign corporation or partnership. It also reports transfers to and distributions from foreign trusts, where the penalty for not filing starts at the greater of $10,000 or 35% of the gross value involved.
Two thresholds, five times apart, and only one of them moves
A gift from your grandmother abroad and a gift from a company abroad are reported under the same form and tested against completely different numbers. From a nonresident alien individual or a foreign estate the threshold is $100,000. From a foreign corporation or partnership it is $20,573 for tax year 2026.
The second one is indexed for inflation and the first is not, which means the gap between them widens every year and any page stating a single figure for "gifts from foreign persons" is wrong about at least one of the two cases.
Both thresholds aggregate. Gifts from the donor and from persons you know or have reason to know are related to that donor are added together for the year. Two parents sending separate transfers are one aggregate, and a family splitting a gift across several relatives has not split the reporting.
What the Service says about the individual threshold
The quote below is the sentence this figure was read from, stored with a hash of the text as it stood on 06 September 2026. If the document changes, the hash stops matching and the change is surfaced rather than absorbed.
“you are required to report the receipt of such gifts or bequests only if the aggregate amount received from that nonresident alien or foreign estate, or foreign person that you know or have reason to know are related to the nonresident alien or foreign estate, exceeds $100,000 during the taxable year.”
That is Gifts from foreign person, reporting threshold for a nonresident alien individual or foreign estate, IRC 6039F, from Gifts from foreign person, read on 06 September 2026. The sentence above is archived with a hash of its text as it stood that day, so a change at source shows up here rather than being absorbed silently.
The rule also carries a note from the ingest, which is worth reading because it is the sort of thing normally left where only a maintainer would see it: “Not indexed, unlike the entity threshold, and aggregated across related donors. A parent and a sibling abroad sending separate gifts are added together. Reporting a gift is not paying tax on it: a gift from a foreign person is not income to the recipient, and the filing exists so the Service can see it.”
The entity threshold, tax year by tax year
Because this one is indexed, the figure a reader needs is the one for the tax year the gift was received in, not the year they are filing in. The store holds three.
| Tax year | Threshold | Return filed during | Change on the year before |
|---|---|---|---|
| 2024 | $19,570 | 2025 | first year in the store |
| 2025 | $20,116 | 2026 | +$546 |
| 2026 | $20,573 | 2027 | +$457 |
- The individual threshold across all three of those years was $100,000, unchanged, because it is not indexed. Set beside the table above, that is what a fixed threshold looks like next to a moving one.
- The tax year is the year the gift was received. Conflating it with the filing year is the single most common error in this subject and it puts a reader one row out of date by construction.
Reporting a gift is not paying tax on it
A gift from a foreign person is not income to the person receiving it, and Form 3520 does not compute a liability. It is an information return. The reason people find that hard to believe is that the penalty for not filing it is severe enough to look like a tax.
What the filing does is make the transfer visible. A large sum arriving from abroad that is never explained is the shape of a great many things, most of them not gifts, and the reporting regime exists so that a genuine gift can be distinguished from the rest without an examination.
The corollary matters for anyone who inherited from a relative abroad. A bequest is caught by the same threshold and the same form. Somebody who receives $150,000 from a parent's estate overseas owes no United States tax on it and has a filing obligation they usually do not know about.
The trust half of the form, which is the expensive half
Form 3520 also reports transactions with foreign trusts, and the penalties there are structured differently: the greater of $10,000 or a percentage of the gross value involved.
| What was not reported | Percentage | Of what |
|---|---|---|
| Creation of or transfer to a foreign trust | 35% | the gross value of the property transferred |
| A distribution received from a foreign trust | 35% | the gross value of the distribution |
| A foreign grantor trust failing to file Form 3520-A | 5% | the gross value of the portion of the trust's assets treated as owned by the US person |
- Gross value, in every row. Not gain, not income, not the taxable portion. A transfer that produced nothing still carries 35% of what was transferred.
- The third row is charged to the United States owner for a failure by the trust. A foreign trustee who has never heard of Form 3520-A is not the person who pays.
- The word "initial" in the statute is doing work: further penalties accrue where the failure continues more than ninety days after the Service gives notice.
What the instructions say about the trust penalty
The quote below is the sentence this figure was read from, stored with a hash of the text as it stood on 06 September 2026. If the document changes, the hash stops matching and the change is surfaced rather than absorbed.
“35% of the gross value of any property transferred to a foreign trust for failure by a U.S. transferor to report the creation of or transfer to a foreign trust in Part I.”
That is Instructions for Form 3520, Penalties, IRC 6677(a), Part I failure, from Instructions for Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, read on 06 September 2026. The sentence above is archived with a hash of its text as it stood that day, so a change at source shows up here rather than being absorbed silently.
The rule also carries a note from the ingest, which is worth reading because it is the sort of thing normally left where only a maintainer would see it: “On the GROSS value transferred, not on any gain and not on any income the trust earned. A transfer that produced no income at all still carries it.”
What counts as a foreign trust is wider than it sounds
The word trust does most of the damage here, because a great many arrangements that nobody involved would call a trust are treated as one. Certain foreign pension and savings arrangements, certain investment structures and certain family holding vehicles have all been treated as foreign trusts for this purpose.
This site holds the thresholds and the penalty rates as rules and does not hold the definition, so this page does not enumerate what is in and what is out. That boundary is exactly the sort of thing that gets paraphrased into something confidently wrong, and a reader near it needs the instructions rather than a summary of them.
The practical advice that follows from the numbers rather than from the definition: where the arrangement might be a foreign trust and the value is substantial, the cost of asking is small against 35% of gross value.
Four cases where the obligation is missed
An inheritance from a parent abroad of $250,000
No tax, a filing obligation, and almost nobody knows.
Gifts of $60,000 each from two siblings abroad in the same year
Aggregated to $120,000, over the $100,000 threshold, where each on its own would be under it.
A transfer of $25,573 from a family company abroad
Tested against the entity threshold of $20,573, not against $100,000, and over it by a margin most people would not think to check.
A foreign retirement arrangement that turns out to be a foreign trust
The reporting obligation runs annually rather than once, and the penalty is measured on assets rather than on contributions.
How to check a figure you found somewhere else
The reason this subject is unreliable online is not that writers are careless. It is that the figures change annually, they are published in documents nobody reads for pleasure, and a page that was right when it was written stays online long after it stops being right. A page with no date on the figure is not making a claim you can check.
Which tax year does this apply to?
And is that the year the income was earned or the year the return is filed? The two are different years and most pages do not say which they mean.
What document set it?
Does the page name the section, or does it name the website? A citation to a government home page is not a citation to anything a reader can check.
When was it read?
And does the page say? A figure with no read date is a figure whose staleness cannot be assessed, which is the same as an unsourced one.
Applied to the Form 3520 thresholds, those three questions are answerable from this page: every figure names its tax year, its source document and section, and the date it was read, and the sentence it came from is archived with a hash so a change at source shows up rather than being absorbed silently.
That standard is not a courtesy. A calculator or a guide that quietly serves last year's figure produces an answer no reader can distinguish from the right one, which is worse than an obvious error and far harder to notice.
Where this sits alongside the calculators
Reporting obligations and tax liability are different questions and they are answered by different parts of this site. This page is about the Form 3520 thresholds: a threshold or an amount set by a document, which either applies to you or does not.
The calculators answer the other question. They take a gross salary in one of the jurisdictions this site models and compute what is actually deducted from it, band by band, with each rate carrying the rule behind it. Every one of those jurisdictions has been checked against the average tax rates the OECD publishes for a single person at three different incomes, and any jurisdiction that missed by more than half a percentage point is not published at all.
Somebody working abroad usually needs both. The domestic calculation tells you what the country you live in takes. Pages like this one tell you what your home country still wants to know about. Neither substitutes for the other, and a page that blurs them is the reason so many people abroad discover a reporting obligation years late.
What this site does not do
It does not give advice, and it does not model your situation. Everything here assumes a single person on employment income with no dependants and no reliefs beyond those stated, because that is the only shape that can be computed identically across jurisdictions and compared honestly.
It does not model treaty relief, foreign tax credits, remittance rules, self-employment, or the interaction between two countries taxing the same income. Those are real and they change answers, and each of them requires facts about you that a page cannot know.
What it does do is state the underlying figures accurately, with their sources, and compute the domestic position in each jurisdiction it covers. That is the input every adviser asks for first, and it is the part most often wrong on the pages that rank above this one.
Every figure on this page, and where it came from
Every figure above is a rule in a store, carrying the document it came from, the section that set it, the date it was read and an archived copy of the sentence. Where this site holds no rule for a fact, the fact is not stated. Here is the whole set, so the page can be checked rather than believed.
Questions about the Form 3520 thresholds
How much can I receive from abroad before reporting it?
$100,000 from a nonresident alien individual or a foreign estate, aggregated across related donors for the year. From a foreign corporation or partnership the threshold is $20,573 for tax year 2026, because that figure is indexed for inflation and the other is not.
Do I pay tax on a gift from a foreign person?
No. A gift from a foreign person is not income to the recipient and Form 3520 computes no liability. It is an information return, and the reason it feels like a tax is that the penalty for not filing it is severe.
Is an inheritance from abroad reportable?
Yes, on the same form and against the same thresholds. A bequest from a foreign estate above $100,000 is reportable even though no United States tax is due on it.
What is the penalty for a late Form 3520?
For a trust matter, the greater of $10,000 or 35% of the gross value transferred or distributed, or 5% of the trust assets treated as owned by the US person where the trust fails to file Form 3520-A. Gross value in every case, not gain and not income.
Why do different pages give different foreign gift thresholds?
Usually because they are quoting the entity threshold in a year other than yours, or quoting one of the two thresholds as though it were both. The entity figure moves annually. It was $19,570 for 2024, $20,116 for 2025, $20,573 for 2026.
What if my question is about the Form 8938 thresholds or the FBAR threshold instead?
Each has its own page here, built the same way from its own rules. If the question is what you owe on a salary rather than what you must report, the calculators are the other half of this site. And the Form 3520 thresholds carries its tax year on every figure, because the year a rule applies to is not the year you file it.
Related, and built the same way
These come up in the same conversation as the Form 3520 thresholds, and for the same reason: the obligations in this subject overlap, and meeting one of them says nothing about whether another applies.
Form 8938 thresholds, all ten of them
Form 8938 has ten thresholds, not one: filing status crossed with whether you live abroad crossed with whether the test is the last day of the year or any time during it. A single filer abroad reports at $200,000 on the last day; the same person living in the US reports at $50,000.
The FBAR threshold, and the word that trips people up
The FBAR threshold is $10,000 in aggregate across all foreign financial accounts, tested at any point in the year rather than at year end. Both halves of that sentence catch people out.
PFICs, Form 8621, and why a foreign index fund is the problem
Form 8621 is not required where your aggregate PFIC stock is worth $25,000 or less, or $50,000 or less on a joint return, and there is no excess distribution or disposition. An excess distribution is the part above 125% of the average of the three preceding years.
Ruleset sha256:fe993d9d072cbcac. This guide turns on 8 rules, all at ingested status. Method on methodology, full provenance on the source of record, every reading on the changelog, and anything we got wrong on corrections.
Written by Usain Olivard, who is not a qualified tax adviser. The most recent figure on this page was read from its source on 06 September 2026, which is the same date this page reports as its last modification.