Gifts and inheritances for Americans abroad

Getting a gift is almost never taxable in the US. Getting a gift from abroad and not telling the IRS is what costs money.

The short version

Receiving money is usually tax-free in the US. In the American system, the giver deals with gift tax, not the person who receives it.
Gifts and bequests from foreign people over USD 100,000 in a year go on Form 3520. No tax, but the late-filing penalty can reach 25% of the gift [2].
The lifetime exemption is huge: USD 13.99 million for 2025 and USD 15 million for 2026 per person [1].
The annual exclusion is USD 19,000 per recipient in both 2025 and 2026 [1].
A spouse who isn't a US citizen changes everything: gifts are capped at USD 190,000 for 2025 and USD 194,000 for 2026, and the estate rules need planning [3].

Who pays gift tax, and when

Americans often get this backwards. In the US, the person who makes the gift is responsible for any gift tax, and almost nobody pays it, because of two allowances:

Allowance	2025	2026
Annual exclusion, per recipient [1]	USD 19,000	USD 19,000
Basic exclusion amount (lifetime gifts plus estate) [1]	USD 13,990,000	USD 15,000,000
Annual exclusion for gifts to a non-citizen spouse [3]	USD 190,000	USD 194,000

Give more than the annual exclusion to one person in a year, and you file Form 709 to report it. The excess is subtracted from your lifetime amount. Tax is only due after you've used up the whole lifetime exemption. The 2026 figure follows a law signed on July 4, 2025, Public Law 119-21 [1].

Your US citizenship means these rules follow you abroad. If you live in Madrid and send your daughter USD 50,000 for a down payment, you file a Form 709 just as you would from Minneapolis.

Gifts and inheritances from abroad: Form 3520

This is the one that catches expats. Foreign gifts aren't subject to US income tax, but they can be reportable [2].

The thresholds

You report on Form 3520, Part IV, when you receive in a tax year [2]:

More than USD 100,000 in gifts or bequests from a nonresident alien individual or a foreign estate. Once you pass that, you list each gift over USD 5,000.
More than USD 20,116 (2025) or USD 20,573 (2026) in purported gifts from foreign corporations or foreign partnerships.

You must add together gifts from related people [2]. If your mother-in-law gives you USD 60,000 and your father-in-law gives you USD 60,000, that's USD 120,000 from related foreign people, and it's reportable.

Here's a real-life scale check. USD conversions in this guide use the Federal Reserve H.10 rate of October 30, 2026, USD 1.1163 per euro. A gift of EUR 95,000 from your German in-laws toward an apartment is about USD 106,000. That crosses the line even though it sounds like less than USD 100,000.

Deadlines and penalties

Form 3520 is due on the 15th day of the fourth month after the tax year ends, so April 15 for most people. Americans living abroad get until the 15th day of the sixth month, which is June 15 [2].

Skip it, and the penalty is 5% of the gift's value for each month it's late, up to 25% [2]. On a USD 200,000 inheritance, that's up to USD 50,000 for a form that would have cost you nothing. Reasonable cause can get the penalty waived, but don't count on it [2].

Gifts from your non-citizen spouse count too

Here's the twist for mixed-nationality couples. If your spouse is a nonresident alien and transfers more than USD 100,000 to you in a year, that's a foreign gift on your Form 3520. Couples who move money between accounts as if it's all one pot can trip this without noticing. Our guide to being married to a non-American covers filing status and joint accounts.

Inherited accounts and property abroad

An inheritance from a foreign relative often comes as a foreign bank account, shares or a share of a house. Three things follow:

Form 3520 if the bequests pass USD 100,000 in a year [2].
FBAR and Form 8938 for any foreign accounts you now own or control.
A new tax basis. Property you inherit generally takes its fair market value at the date of death, so selling soon after usually means little or no gain [4]. Get a written valuation in the local currency and record the dollar rate on that date.

If the giver was someone who renounced US citizenship and counts as a "covered expatriate," a separate US tax can apply to the American who receives the gift or inheritance. That's rare, but if it fits your family, ask a professional before you accept the money.

When your spouse isn't a US citizen

Between two US citizen spouses, gifts and inheritances are unlimited and tax-free. If your spouse isn't a citizen, two limits kick in.

Lifetime gifts

The unlimited marital deduction for gifts doesn't apply. Instead, you can give your non-citizen spouse up to USD 190,000 in 2025 and USD 194,000 in 2026 each year without using your lifetime amount [3]. Bigger gifts are possible, but they eat into your exemption and need a Form 709.

That matters when you buy a home abroad together. If you pay for it and title goes to both of you, part of the purchase may count as a gift to your spouse.

At death

The estate tax marital deduction for a non-citizen surviving spouse is generally only available if the assets pass into a qualified domestic trust, usually called a QDOT, under Section 2056A of the tax code [4]. With the 2026 exemption at USD 15 million, most families will never owe US estate tax either way. But for larger estates, or if the exemption changes in the future, the QDOT question is real.

The estate of a US citizen who dies abroad is still subject to US estate tax on worldwide assets. Form 706 is due nine months after death, with an automatic six-month extension on Form 4768 [4]. Even below the threshold, the executor may want to file to elect portability, which lets a surviving spouse use the unused exemption [4]. Ask whether that's available when the surviving spouse isn't a citizen.

Your host country has its own rules

The US system taxes the giver. Many other countries tax the receiver, and they may tax you because you live there.

Recipient-based systems: in countries such as Germany and Spain, gift and inheritance tax generally falls on the person who receives the money, with rates and allowances that depend on how closely you're related. Living there can make a gift from your parents in Florida taxable locally.
Estate-based systems: the UK charges inheritance tax on the estate of the person who died, with different rules for people who've lived there a long time.
No gift or inheritance tax: some countries have none at all.
Estate and gift tax treaties: the US has these with a small number of countries. They can decide which country taxes first and allow a credit. Most income tax treaties don't cover gifts or estates.

US gift tax rarely bites, so there's often no US tax to credit against a foreign one. That means the foreign tax is usually the real cost. Check the host country's rules before a large transfer, not after.

A checklist before money changes hands

Who's giving, and are they a US person? That decides whether it's a Form 709 issue for them or a Form 3520 issue for you.
Add up everything from related foreign people this year, converted at the rate on the day you receive each gift.
Check your host country's gift or inheritance tax, including allowances for children and spouses.
If the gift is to or from a non-citizen spouse, check it against the USD 194,000 limit for 2026 and the USD 100,000 Form 3520 threshold.
Keep proof: a short gift letter, bank statements and, for inheritances, the death certificate and estate documents.
Put Form 3520 on your calendar with your 1040 and FBAR. A US expat tax preparer (or a lawyer) can check your situation.

Gifts and inheritances: what Americans abroad owe, report and can give