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Will Bank Ask about my $20,000 Gift?
My parents have a bank account in another country and they want to withdraw the money and give it to me as a gift, as I'm planning to buy a property. The amount is about $20,000.00. Will the bank question how I acquired the money and will I have to pay tax on it regardless if I make one full deposit of $20,000.00 or separate deposits of $10,000.00 in the form of a check? Because my mother is the remmiter of the cashier's check, will she be questioned for whatever reason?
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 If you were to deposit cash in that amount the bank would be required to ask you certain questions and to fill out a form that the law requires them to do, called a Currency Transaction Report or CTR. You can search BQ on these terms to learn more.
Having a CTR filed doesn't mean you are a criminal or a suspect in any way, and it doesn't mean you must pay taxes on that money. As to taxable income, that is between you and the IRS, not your bank.
You may have to explain to a lender where you got your $20,000 down payment. As they review your loan qualifications, if you go from no money in the bank to $20,000, they would ask the source. If it is expected to be repaid, it is a debt and they need to know that. If it is a gift, document it as such. Again, the IRS implications are between you and the IRS and possibly any estate planning your parents want to do.
We absolutely wouldn't recommend trying to hide any of the money or its source or breaking up the deposits into smaller chunks. Some of what may be done could actually be illegal and then you would have problems.
Even if you deposit a cashier's check, expect some questions. There are so many scams out there that now involve cashier's checks, the bank absolutely has the right to ask about a deposit. Customers who say they won a lottery they didn't enter, or they sold something on eBay and the person paid them too much with this check, or they now work and home and assist in processing receivables or payroll for an international company, are all warning signs that scream scam. When the check bounces and the customer has spent the money, the bank is facing the loss. Yes, they may well ask.
Published on BankingQuestions.com 2/09/10
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