Aggregating Foreign Gifts: Why Multiple Donors Add Up
Tax Research Desk
The aggregation rule in one sentence
For Form 3520 Part IV purposes, gifts from related foreign donors are aggregated and the $100,000 threshold is tested against the total — not against each individual gift.
This is the rule that catches the most filers off-guard. Many people are confident their grandmother's $80,000 wire is "below the threshold" only to discover that adding her husband's $30,000 wire takes them over.
Who is "related" for this purpose
Form 3520 incorporates the family-attribution rules from IRC § 267(c)(4) by reference (and there is additional guidance in the Form 3520 instructions). The practical effect:
- Spouses are related. A wife and a husband are one donor unit.
- Direct ancestors and descendants are related to you. Parents, grandparents, great-grandparents, children, grandchildren.
- Siblings are related to you. Including half-siblings.
- In-laws are generally NOT related for this purpose — your spouse's parents are not aggregated with your own parents.
- Cousins, aunts, uncles, nieces, nephews are NOT related for aggregation purposes. (They are technically family but the Code's family-attribution rules are narrower.)
- Entities under common control are related. A foreign corporation that your foreign aunt owns 100% may be aggregated with her personal gifts.
A worked example
Pranav, a US person in California, receives the following from foreign donors in tax year 2025:
| Donor | Relation | Amount |
|---|---|---|
| Mother (NRA) | direct ancestor | $40,000 |
| Father (NRA) | direct ancestor (spouse of mother) | $35,000 |
| Maternal grandfather (NRA) | direct ancestor | $25,000 |
| Paternal uncle (NRA) | NOT a direct ancestor or sibling | $30,000 |
| College friend (NRA) | not family | $5,000 |
Pranav's aggregations:
- Mother + father (spouses): combined $75,000.
- Maternal grandfather: $25,000.
- Are all three (mother + father + grandfather) aggregated as one unit? The mother and grandfather are direct-ancestor related to Pranav and to each other (parent-and-child). The IRS would likely aggregate them as one $100,000 unit.
- Paternal uncle: NOT direct ancestor — separate, $30,000.
- College friend: separate, $5,000.
So Pranav's reportable analysis:
- Family aggregation unit: $40,000 + $35,000 + $25,000 = $100,000. Exactly $100,000, which does not trigger filing — but $100,000.01 would. With this little headroom Pranav should file out of caution.
- Uncle alone: $30,000 < $100,000 → not separately reportable.
- Friend alone: $5,000 < $100,000 → not separately reportable.
If Pranav's parents had given him $40,000 + $40,000 instead of $40,000 + $35,000, total $80,000, plus grandfather $25,000 = $105,000 — clearly over, must file.
The conservative approach
When in doubt, aggregate and file. Over-disclosure on an informational form is not penalized; under-disclosure can be penalized 25% of the gift amount.
Aggregate everything from blood-related ancestors, descendants, siblings, and their spouses. Treat that as your "family unit total." If the family-unit total exceeds $100,000, file.
For non-family foreign donors (friends, business associates), aggregate only by donor-pair if they are entities under common control. Otherwise treat as independent.
Why this matters more for inheritances
Inheritances frequently come from multiple related parties because estates pass through generations. A grandparent's death triggers a primary inheritance to the surviving spouse, but probate may also distribute portions to grandchildren simultaneously. Each grandchild beneficiary receives less than $100,000 alone — but combined with prior or subsequent gifts from the same family unit, may cross.
What we do in the app
When you enter multiple foreign donors in our question flow, we ask about each donor's relationship to you and to the other donors. If any of your donors are spouses, direct ancestors, descendants, or siblings of each other, we aggregate them into a single donor unit on the reporting line — and we compute the total to test against the threshold.
The form itself does not have "aggregated donor" syntax — each donor goes on a separate line in the Part IV tables. The aggregation question matters for whether you file, not for how the form is filled out.
3520file is software, not a CPA firm or law firm. We prepare IRS Form 3520 based on the facts you provide. For advice on your specific situation, talk to a tax attorney or CPA. The above is plain-English explanation, not tax advice.