Hi. My friend and his wife, in their mid 60s, obtained their US green cards and have been living in US since 2024. They have retired in their home country. Recently He just told me that they have sold their primary and only home in their home country. The sale proceeds (about $300k USD) are currently sitting in bank accounts in their home country.
Their home country has very strict currency-exchange and wire-transfer controls. From 2026, each citizen is allowed to exchange and wire only about $10k USD each year, and only for approved purposes (e.g., education, medical expenses, travel). Prohibited uses include investment, buying foreign property, or transferring funds to foreign bank accounts to earn interest. My friend wants to use the money to buy a small condo in the U.S., but this appears to be disallowed under their home country’s rules.
A proposed workaround came from another friend, “J,” who is from the same home country but now lives in the U.S. J suggested that he could give my friend USD cash in the U.S. (about $100k this year and maybe another $100k next year), while my friend transfers an equivalent amount of local currency into J’s bank account back in their home country. J says his U.S. income is legitimate and that he has elderly family members in the home country who need funds.
My friend wanted to ask, can this be viewed as personal exchange of foreign currency, and is this type of arrangement allowed from a U.S. law and tax perspective? If my friend deposit large amounts of cash ($100k or $200k) into his US bank account, would his US bank flag him or IRS go after him? Are there IRS reporting issues? Any insight would be greatly appreciated.
Using a Friend to Move Foreign Home Sale Proceeds Into the U.S: Is This OK in the U.S.?
byu/zorro_usa84 intax
Posted by zorro_usa84
3 Comments
As U.S. tax residents they presumably will report the sale of the property on their U.S. Form 1040 and have been filing Fincen 114s such that the U.S. federal authorities will be apprised of their situation. Selling of currency may produce exchange gain/loss to report. Personal exchange loss may not be deductible.
The U.S. doesn’t have currency exchange controls, nor does it have restrictions around people doing family/personal “currency exchange”. This is in fact quite common.
Use something similar as an escrow company or lawyers to facilitate the movement. Otherwise I would worry about funds getting stolen or lost.