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Is incoming foreign fund from South Korea for F-1 visa holder subject to taxation?

New York, NY |

I have fund came from South Korea and I am wondering if I have to report this is IRS. I am filling my tax this year because of my income through CPT (1099) and on-campus work (W2). The fund was one hundred thousand US dollar.

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Attorney answers 2

Posted

Income would include gifts, and especially gifts of $100,000.00. It would also include foreign salaries sent to you, and any capital gains from investments that you realized.

If you have been sent $100,000.00, then you should hire an accountant to handle the taxes on this. The fact that you are a student does not change the fact that this is income. In fact, this may violate your immigration status as a student, so you should also speak to an immigration attorney.

If the $100,000.00 was used for tuition, there may be additional things to consider. This is why you need the specific assistance of an accountant or tax attorney.

This does not constitute legal advice or the engagement of my services as an attorney.

Posted

As an F-1 (from immigration status) and NRA from a tax perspective you would have been exempt from filing if reporting your condition with form 8843. However, because you generated US-source income or effectively connected income (ECI) you you need to file form 1040-NR. If you have dependents 104-NR-EZ. Thus, you are not exempt from filing. You must report your income. The other question is whether funds coming from your home country can be considered income. You have to refer to the Tax Treaty between USA and South Korea (1976), art. 21. http://www.irs.gov/pub/irs-trty/korea.pdf . Funds remitted for tuition are exempt from taxation for 5 years. Income generated in the US is exempt if below $2000 or $5000 under certain conditions. Please read the Treaty and consult with an international attorney. Best

This reply is offered for educational purpose only. You should seek the advice of an attorney. The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than an educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the undisclosed individual asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of New York. Responses are based solely on New York Law unless stated otherwise. Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice contained in this written or electronic communication is not intended or written to be used and it cannot be used by any person or entity for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. Federal taxing authority or agency or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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