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Transferring about $100K from India to US?

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Parents will be moving/retiring here in the US in the next year or so.  Indian citizens and Green card holders, but might get citizenship here eventually. 

What's the best way to transfer about $100K from India to US? Will it have any repercussions if I deposit in my accounts? 
 

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You're 100% correct.   I should have read the entire article.

cestmoi123 (Jul. 12, 2017 @ 7:43a) |

Sorry, got tied up, couldn't respond.

hawala is used in India and ADDITIONALLY by terrorists, thus opening that can of wo... (more)

Technologist (Jul. 15, 2017 @ 8:47p) |

You mean end of misconception.  We are not currently at war with anyone and ergo not sending anyone to a prison run by t... (more)

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A few more facts would be useful, like (1) are parents currently in the US, and/or currently have a US/USD bank account, and (2) do you plan on wiring USD from Indian USD bank account?

If the answer to both questions is "yes," it's a pretty straightforward transaction, i.e., supply Indian bank with US bank info (account number, SWIFT code, ABA number) and have them initiate wire.  Make sure that Indian bank is FATCA-compliant to ensure no US withholding.

Personally, I would stick with bank wire, as opposed to money service providers like Western Union, etc.

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They're in India, but go back/forth quite often. They bring cash over in small amounts each time, but I don't think thats safe..

I'm pretty sure India has currency controls for that amount w/ wire transfers. Also I'm concerned about having US assets in their name re: long term insurance etc

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I know of a Nigerian prince that can help you if you help him transfer his millions in assets. He trusts in you that you won't steal any of it.

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Before you do anything, make sure they were complying with FACTA before the try to bring the money over.

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MilleniumBuc said:   Before you do anything, make sure they were complying with FACTA before the try to bring the money over.
  
Multinational banks in India are aware of FACTA? or Lawyers there? 

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needhelpplease said:   MilleniumBuc said:   Before you do anything, make sure they were complying with FACTA before the try to bring the money over.
  
Multinational banks in India are aware of FACTA? or Lawyers there? 

They should be. What happens is that as a green card holder they are supposed to file taxes, even from international income. In their tax filings they must disclose all their banking holdings. If they don't, there is an eventual penalty. Most international banks now ask if you are an American or green card holder so that they can report back to the US treasury.

If you just try to bring the money and have never declared it in your taxes, they will take a big cut in back-penalties.

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hmm. This might be another reason to put it in my name. I've always paid taxes and am salaried. Will the IRS care if I have large deposits/ cash transfers?

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You really need to read more about this before you do something that will cost you a lot of money. If you tell them it's new money then you have to pay ordinary taxes on it. If you told them you had it for a while and it's more than 10k (I think that is the minimum threshold) then you have penalty for previous years taxes for not reporting it. And they might decide they want to look at more than 3-5!years if the consider it fraudulent.

No easy solutions. Easiest would be them wclaiking that they were making less than what is the minimum IRS requirement to file and go from there. But again, too many variables, and you need to read up on this.

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Consult a CPA

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The IRS minimum to file is $10k in foreign assets. So as long as your parents have been filing their taxes each year they should be fine.

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Anyone use a service like transferwise to get (a better/the best) exchange rate? It seems like it may be worth a shot...

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RussellJohnson said:   Consult a CPA
  
definitely will.  

They don't make a lot in $ US  but have the typical 90% savings rate for India= $100k in cash.

Maybe it's best to bring it here piece meal in 10K increments. Will depositing in different banks over  X years cause a red flag.

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phisher4 said:   Anyone use a service like transferwise to get (a better/the best) exchange rate? It seems like it may be worth a shot...

I don't think any of these work FROM India. There are tons TO India.   

https://transferwise.com/help/article/1570071/basic-information/...

 

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gnopgnip said:   The IRS minimum to file is $10k in foreign assets. So as long as your parents have been filing their taxes each year they should be fine.
  
Will talk to CPA about filing back taxes in US. Again they don't make a lot in India. Will ask them for amounts. Will the IRS even accept Indian returns?

Do any retail accountants specialize in this here or India? I

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MilleniumBuc said:   You really need to read more about this before you do something that will cost you a lot of money. If you tell them it's new money then you have to pay ordinary taxes on it. 
  
What if it's a gift?

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needhelpplease said:   
RussellJohnson said:   Consult a CPA
  
definitely will.  

They don't make a lot in $ US  but have the typical 90% savings rate for India= $100k in cash.

Maybe it's best to bring it here piece meal in 10K increments. Will depositing in different banks over  X years cause a red flag.

  
Yes.  Structuring is illegal.  

https://en.wikipedia.org/wiki/Structuring

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When did they become GC holders? Do they have SSN or ITIN already?

As Green Card Holders, they are suppose to file taxes in US (even without US income) hence they should report their foreign financial asserts (if more than 100K) on form 8438 which goes with 1040.
They should also file FBAR for all accounts more than 10K.
There are huge penalties for not doing these two forms and IRS is getting serious about it.

If they got GC this year, you are safe.

Even banks in India now want you to provide SSN to them (... risky ...) so that they can report back to US government as per FACTA

I would not recommend transferring it to your own account because same rule apply to you ... unless you claim it as a gift from them ... rules are different for that.

I am not lawyer or CPA and you should contact some Indian CPA in SF Bay Area or New Jersey Area ... they should be able to give you advice on air (radio) also ... or on phone or in person (if you happen to be in these areas)

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DoonGuy said:   When did they become GC holders? Do they have SSN or ITIN already?

As Green Card Holders, they are suppose to file taxes in US (even without US income) hence they should report their foreign financial asserts (if more than 100K) on form 8438 which goes with 1040.
They should also file FBAR for all accounts more than 10K.
There are huge penalties for not doing these two forms and IRS is getting serious about it.

If they got GC this year, you are safe.

Even banks in India now want you to provide SSN to them (... risky ...) so that they can report back to US government as per FACTA

I would not recommend transferring it to your own account because same rule apply to you ... unless you claim it as a gift from them ... rules are different for that.

I am not lawyer or CPA and you should contact some Indian CPA in SF Bay Area or New Jersey Area ... they should be able to give you advice on air (radio) also ... or on phone or in person (if you happen to be in these areas)

  
What're the gift rules? Where can I look it up.

Any recommendations for   Indian CPA in SF Bay Area or New Jersey Area? or preferably for my parents in Mumbai?

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needhelpplease said:   
phisher4 said:   Anyone use a service like transferwise to get (a better/the best) exchange rate? It seems like it may be worth a shot...

I don't think any of these work FROM India. There are tons TO India.   

https://transferwise.com/help/article/1570071/basic-information/supported-countries#/inr 

 

  
I vaguely recall someone saying that worldfirst.com is one such exchange and transfer service that does do transfers from India, although the memory is hazy.

WorldFirst doesn't have rates as good as TransferWise, but they will be much better than a bank, and they are a large full service company. Worth checking out.

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@OP -- Lots of misinformation and misunderstanding above re:  FATCA, FBAR reporting, etc., too numerous & complex to correct/clarify.  As others suggest, hire an experienced CPA or tax lawyer to navigate this for you.  Assuming no hidden wrinkles, etc., an experienced practitioner should be able to handle with 8-12 billable hours. Shouldn't be hard to get references from the Indian expat community.  

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There is a $250K per person per year allowance for international remittance as long as the purpose falls under the 'liberalized remittance scheme'. Opening a foreign bank account would count. Here are the regulations: https://www.bcasonline.org/Referencer2015-16/Other%20Laws/RBI%20Forms/RBI_Forms/20_Rationalisation_under_LRS_for_Current_and_Capital_Account_Transactions.pdf

They also probably need Aadhaar (and a PAN card, obviously) if they don't already have it.

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gergles said:   There is a $250K per person per year allowance for international remittance as long as the purpose falls under the 'liberalized remittance scheme'. Opening a foreign bank account would count. Here are the regulations: https://www.bcasonline.org/Referencer2015-16/Other%20Laws/RBI%20Forms/RBI_Forms/20_Rationalisation_under_LRS_for_Current_and_Capital_Account_Transactions.pdf 

They also probably need Aadhaar (and a PAN card, obviously) if they don't already have it.

  
Thats good. So India allows outgoing $250K  transfers . We need to figure out the IRS rules here now. 

Wonder why there aren't more transfer services from India (like XOOM etc )

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needhelpplease said:   
DoonGuy said:   When did they become GC holders? Do they have SSN or ITIN already?

As Green Card Holders, they are suppose to file taxes in US (even without US income) hence they should report their foreign financial asserts (if more than 100K) on form 8438 which goes with 1040.
They should also file FBAR for all accounts more than 10K.
There are huge penalties for not doing these two forms and IRS is getting serious about it.

If they got GC this year, you are safe.

Even banks in India now want you to provide SSN to them (... risky ...) so that they can report back to US government as per FACTA

I would not recommend transferring it to your own account because same rule apply to you ... unless you claim it as a gift from them ... rules are different for that.

I am not lawyer or CPA and you should contact some Indian CPA in SF Bay Area or New Jersey Area ... they should be able to give you advice on air (radio) also ... or on phone or in person (if you happen to be in these areas)

  
What're the gift rules? Where can I look it up.

Any recommendations for   Indian CPA in SF Bay Area or New Jersey Area? or preferably for my parents in Mumbai?


I don't know gift rules, CPA will give you that info too.  
Bay Area: Sanjiv Gupta is one I heard off, lsjfinancial is other, search google and/or yelp.

All (private) Indian bank these days have online remittance facility ... but I will say go to 3 or 4 bank ... negotiate who will give you best rate and make transfer ... bargain ... yes.
 

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tuphat said:   @OP -- Lots of misinformation and misunderstanding above re:  FATCA, FBAR reporting, etc., too numerous & complex to correct/clarify.  As others suggest, hire an experienced CPA or tax lawyer to navigate this for you.  Assuming no hidden wrinkles, etc., an experienced practitioner should be able to handle with 8-12 billable hours. Shouldn't be hard to get references from the Indian expat community.  
  
Everyone has their own knowledge and opinions ... no one is perfect ... everyone shares what they understand of these complex IRS rules
I would appreciate if you can share/correct some wrong info presented in this thread for future reference and to help the FWF community
(Everyone might not go to CPA to get the knowledge ... so we depend on each other ... CPA/Lawyer advice is always recommended when making such transactions)

@OP ... would appreciate your experience .... once you are done ... please do come back and share with us

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Quickest summary of relevant US rules --

FATCA -- Strictly speaking, almost all these rules apply to financial institutions and intermediaries (domestic & foreign) as opposed to individuals, although individuals can be indirectly impacted, e.g., foreign banks unwilling/reluctant to open accounts for US persons. The only part of FATCA that individuals are responsible for complying with is reporting "specified foreign financial assets" on Form 8938 (which is different than FBAR reporting).  More info at:  https://www.irs.gov/businesses/corporations/fatca-information-fo...

FBAR -- Separate reporting of foreign bank and financial accounts, on FinCEN Form 114.  Some folks may have to file both.  For comparison of  assets/requirements, see:  https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-...

As stated earlier, an experienced CPA or tax attorney should be able to knock everything out in a couple hours, to ensure that you are fully compliant and not exposed to the considerable penalties attached to each reporting regime. As a client, you still obviously have to do some footwork, e.g., supplying account statements & balances, etc.

Final note:  from a US tax perspective, the actual transfer of the $100k from parents' Indian account to the their US account is a nothing, i.e., one pocket to the other.  No income tax consequences.  (I'm assuming that parents are being treated as resident aliens.)

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needhelpplease said:   
DoonGuy said:   When did they become GC holders? Do they have SSN or ITIN already?

As Green Card Holders, they are suppose to file taxes in US (even without US income) hence they should report their foreign financial asserts (if more than 100K) on form 8438 which goes with 1040.
They should also file FBAR for all accounts more than 10K.
There are huge penalties for not doing these two forms and IRS is getting serious about it.

If they got GC this year, you are safe.

Even banks in India now want you to provide SSN to them (... risky ...) so that they can report back to US government as per FACTA

I would not recommend transferring it to your own account because same rule apply to you ... unless you claim it as a gift from them ... rules are different for that.

I am not lawyer or CPA and you should contact some Indian CPA in SF Bay Area or New Jersey Area ... they should be able to give you advice on air (radio) also ... or on phone or in person (if you happen to be in these areas)

  
What're the gift rules? Where can I look it up.

Any recommendations for   Indian CPA in SF Bay Area or New Jersey Area? or preferably for my parents in Mumbai?

  
OP: Gift amount is 14K per parent to child per each year - meaning your father can gift 14K a year to you and so can your mother. There are no gift taxes in India for gifts from parents to child and no taxes for you to pay if you stay within the limits. Do consult a CPA - there are multiple in Bay Area who can provide advice from both sides. But I have done this in past - the difference is my parents are not GC holders so YMMV. Hopefully you can do this for multiple years. Ask CPA about that as well. I did only once as parents wanted to pay towards children 529 but it was becoming a big hassle so we chose the route of parents gifting me 10K or so each.

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paypal?

(just mark it as family so you can save the 3% commission).


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Aren't the citizen in India supposed to be in poverty, yet they have more money to take to the US with them than the average US worker. If you made that much in India what M/O of coming to United States? The average US worker does not have that kind of money saved, here in California we are heavily taxed to pay for poverty programs and assistant to migrants.

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teacherca said:   Aren't the citizen in India supposed to be in poverty, yet they have more money to take to the US with them than the average US worker. If you made that much in India what M/O of coming to United States? The average US worker does not have that kind of money saved, here in California we are heavily taxed to pay for poverty programs and assistant to migrants.
  
It is called "saving."  That $100K is probably their entire life savings - it is the equivalent of the money you have in a 401K or similar.  One thing about "poverty" countries (India isn't one, BTW, their scale is just different) is that "basic" housing is much cheaper than in the US.  A tech who makes $10/hr there is doing okay and can afford a house.  The reverse tends to be true as well, very nice housing is MUCH more expensive.  (that was my experience in MX, I haven't lived in India but I work with guys there regularly -- both here and remotely)  

Most Americans who HAVE a 401K probably have much more than 100K in it.  

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When I was a GC holder, my dad transferred $80k to my bank account to help with a home purchase. It was a straight forward transfer from his bank in Asia to my US based bank. There was no tax implications. The transfer was not taxed. His bank only asked the wire transfer info including the SWIFT code if the US bank has it. They never asked him for my info beyond the name, address, routing, and account #.

FYI, parents of foreign students transfer money to their kids bank account in the US all the time. My parents did when I was a student here.

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if your parents transfer large sums of money in to your account, it will be considered as 'gift' and there are laws on how much tax free 'gift' you can receive. you may have to pay taxes in this scenario also.
as a green-card holder, one is supposed to be filing taxes in US. if you are putting them as dependents in your tax returns, then they may not have to file separate tax returns.
best thing will be to check with a CPA/firm that specializes in foreign taxes also.

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Ubie said:   When I was a GC holder, my dad transferred $80k to my bank account to help with a home purchase. It was a straight forward transfer from his bank in Asia to my US based bank. There was no tax implications. The transfer was not taxed. His bank only asked the wire transfer info including the SWIFT code if the US bank has it. They never asked him for my info beyond the name, address, routing, and account #.

FYI, parents of foreign students transfer money to their kids bank account in the US all the time. My parents did when I was a student here.

  
You got lucky ... if there was any audit ever (chance though are extremely low) IRS would have questioned why didn't you report this gift.
Rules/crackdown over last few years has increased so better not take a chance now and talk to CPA.

As for the foreign students ... they (or their parents) are not required to file taxes in US by virtue of their immigration status ... so they don't need to file gift taxes. ... but if anyone of them is required to file taxes then anything above the annual limit (14K currently) need to reported/file gift tax (either by the person who gives or by the person who receives, if not already paid/reported by the person who gave).

ETA: You probably didn't do anything wrong ... as per this comment: https://www.fatwallet.com/forums/finance/1573260?showmessage=199...
 
@OP BTW ... mom can give you 14K, dad can give you 14K, mom can give your spouse 14K, dad can give your spouse 14K so total of 56K/per year ... I am not sure if grandparents can give 14K each to grand children ... but then it has to be grand children money

 

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DELETE

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Are they planning to invest that 100K in here? Putting that money in Indian bank's Fixed Deposit, it'll fetch them 8% (or sometimes more than 8, as far as I know) interest from national bank. But if that money is being invested in here and you think ROI is more by bringing it here, go for it.

I think wiring that amount wound not be an issue., but again, CPA is the best path to check.

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They are US GC holders now - which messes up everything.

If they had "gifted" you $100k 1+ year before they got their GC and hence had no IRS tax filing obligation - then that money would be free and clear. You would need to report that as a gift in your tax return - but as a "foreign entity" your dad would have no gift tax liability.

The receiver usually don't have any gift tax liability anyway.

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coolmind said:   Are they planning to invest that 100K in here? Putting that money in Indian bank's Fixed Deposit, it'll fetch them 8% (or sometimes more than 8, as far as I know) interest from national bank. But if that money is being invested in here and you think ROI is more by bringing it here, go for it.

I think wiring that amount wound not be an issue., but again, CPA is the best path to check.

  
- Current interest rate is around 7% and reducing
- Since this is money earned in India it will be NRO FD and Indian IT will ask for TDS which is 30% (or 15% DTAA) (and you can potentially claim it back) but to get them back is a hassle and  require CPA (again) - PS: NRO money can be converted to NRE ... need CPA (again) to issue certificate that money is all white and tax paid ... another hassle 
- If dollar goes up then you loose on transfer rate in future
- You have to report those interest earned in US and probably pay some more taxes (double taxation treaty can save you some but not all) ... CPA needed (again)
- Hassle to maintain the account in India from US (even if it is big private bank ... public bank ... I will not comment). It is pain to close an FD or change address on joint accounts.

More important question is where do you plan to use that money ... based on OP ... they will consume it here ... so better bring it here and invest long term it will beat above hassles and returns 

Please don't beat me up ... these are just my thoughts and I am open to any suggestions

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RedWolfe01 said:   
Most Americans who HAVE a 401K probably have much more than 100K in it.  

  
Congratulations, you get the prize for the worst made up statistic I've seen on FWF today!

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BTW, the lifetime exclusion for gift taxes is over $5 million. In other words you can gift up to $5M with zero tax due.
So most people need not worry about actually paying gift taxes since few of us accumulate that much in our lives.

As others have said you can gift $14k a year per person exempt. But if you want to gift the whole $100k at once, you only need to fill out a form.

Skipping 25 Messages...
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Technologist said:   
RedWolfe01 said:   
Technologist said:   
HumDoHamaraDo said:   Here is the desi answer. You bring the money through legal channels and you are asking for trouble. And they won't qualify for Medicaid for a while. Bring cash, spend cash, use hawala. Yes, it's immoral, but this is fwf.
  Get caught, and they are gonna see what GITMO looks like from the inside!

IANAL, and did NOT read the whole thread....

But I also suggest that you (or they) talk to an immigration lawyer.  Doing this wrong may keep them from coming to / or getting thrown out of the US.  seriously...

  
Except that Gitmo is a military holding facility operating under Geneva Conventions and last I checked we were not at war with India...

It is money they already had on becoming a GC holder from the sound of it.  It is (as another poster put it) -- one pocket to another.  Assuming they move it to their own accounts here.

  Sorry, got tied up, couldn't respond.

hawala is used in India and ADDITIONALLY by terrorists, thus opening that can of worms.  Gitmo becomes an option.  End of story...

  
You mean end of misconception.  We are not currently at war with anyone and ergo not sending anyone to a prison run by the military for detainees under 3 Geneva (Convention relating to the treatment of Prisoners of War).  That would be why there are currently <50 detainees and none of them are recent.  (somewhere around 40 last I heard)  The most recent addition I know of was 2004 or so.   It takes being an enemy COMBATANT and not just providing aid/support.  

Lots of people like to throw around Gitmo as if it were a catch all -- it isn't.  Legally it can only be used for POWs -- it operates under a very specific authority of the military and under the observation of the International Red Cross.  (and yes, all of the detainees ARE being held as POWs under the terms of 3GC -- it was the only way Habeas Corpus would not attach)  Anyone else that is detained by the Justice dept is going to end up at a different facility.   They will also be guaranteed all the usual protections, right to a speed trial and to face their accusers.

https://ihl-databases.icrc.org/ihl/INTRO/375  -- its not as long as it seems, most of the articles are fairly short and to the point and written in fairly simple terms.  (I have had formal training on 3GC)  They are allowed and expected to write to their families regularly, for example.  There was a time that the military tried to both consider them NOT POWs and also deny them Habeas and was firmly told by the courts that if they were detained under the authority of the US Government - of which the military is part - then they must be granted access to the US legal system for redress.  The military quickly (and IMO correctly) re-classified them as POWs under 3GC.  We can hold them as POWs pretty much as long as we want to, no reason to play silly games.

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