Originally Posted by benhogan

If your friend is a US citizen, there are no taxes to be paid when the money comes in to the US.

Keep in mind a couple of things-

1. He cannot wire the money out of the US later on (say he changes his mind). After the money comes into the US, it becomes subject to US laws (obviously he has to pay taxes on interest it earns, etc etc) but there is no tax to bring it in. If the money comes in then he decides to wire the money out, he might be accused of money laundering.

I thought you are free to do what you wish with your $$ as long as you follow proper IRS reporting procedures... i.e. fill out the form when there is a transaction over 10k etc.. Also you have to declare any foreign bank accounts you may own if the total value of them exceeds 10k

2. This money that comes in now becomes part of his future estate and will be subject to US estate tax laws. This tax kicks in when your friend dies.

Yes this part is obvious, as far as US Estate laws, hopefully that's a long time in the future..

So the bottom line is, no taxes are due NOW. When his kids inherit the money, there might be taxes due if the amount is large enough.

As far as the IRS, when low 7 figures get wired into a US account, there's no question as to it's origin??

Just make sure 100% that he is an US citizen. That is the key point.