Cross-border family gifts often trigger confusion—especially between France and the United States. In this episode, we clarify who taxes what, how thresholds apply, and when reporting obligations arise.

🇫🇷 1️⃣ France: Tax Based on the Donor’s Residence

France generally imposes gift tax based on the residency of the donor, not the residence of the recipient.

If the donor is resident in France:

• French gift tax applies

• The recipient’s location (including the U.S.) does not prevent French taxation

For gifts to parents:

• Each parent may receive up to EUR 31,865 from each child

• This exemption renews every 15 years

• Amounts above the threshold are taxed at progressive rates of up to 45%

These rules are set out in the Code général des impôts.

🇺🇸 2️⃣ United States: Tax on the Donor, Not the Recipient

Under U.S. law:

• U.S. gift tax is imposed on the donor, not the recipient

• A non-U.S. citizen, non-U.S. resident donor does not trigger U.S. gift tax merely because the recipient is a U.S. person

However:

• If a U.S. person receives more than $100,000 from a foreign individual

• The gift must be reported on IRS Form 3520

This is an informational filing requirement, not a tax.

⚖️ 3️⃣ Treaty Coordination

The United States–France Estate and Gift Tax Treaty coordinates estate and gift tax rules between the two countries to prevent double taxation.

In practical terms:

• A French-resident donor is generally subject to French gift tax

• The U.S. does not typically impose gift tax on the U.S. recipient

• U.S. reporting obligations may still apply

🎯 Key Takeaway

When gifting from France to a U.S. recipient:

• France taxes based on the donor’s residence

• The U.S. taxes donors—not recipients

• Large gifts to U.S. persons trigger reporting (Form 3520)

• The treaty helps prevent double taxation

The most common risk is not double tax—it’s failure to comply with reporting requirements.