Inheritence received in a foreign country

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated) 

Yahoo!   Google   Windows Live   del.icio.us   digg   Netscape

Subject Author Date Inheritence received in a foreign country taxmax 09-02-2009  Re: Inheritence received in a foreign country Phil Marti 09-03-2009  Re: Inheritence received in a foreign country removeps-groups@yahoo.com 09-04-2009  Re: Inheritence received in a foreign country Alan 09-04-2009  Re: Inheritence received in a foreign country D. Stussy 09-04-2009  Re: Inheritence received in a foreign country Alan 09-04-2009  Re: Inheritence received in a foreign country Stuart A. Bronstein 09-04-2009  Re: Inheritence received in a foreign country Han 09-04-2009  Re: Inheritence received in a foreign country D. Stussy 09-04-2009  Re: Inheritence received in a foreign country dapperdobbs 09-05-2009  Re: Inheritence received in a foreign country Alan 09-05-2009
Posted by taxmax on September 2, 2009, 9:54 pm Please log in for more thread options My sister-in-law inherited a house form her parent in Iran. Her parent was an Iranian and not a resident or citizen of United States. She is American citizen. She paid the inheritance tax in Iran, sold the house and brought the proceeds To United States. She is wondering whether that 1,000,000 exclusion for inheritance tax will apply to her. If not how is going to report the sale proceeds in her tax return? -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Phil Marti on September 3, 2009, 6:08 am Please log in for more thread options taxmax wrote: > My sister-in-law inherited a house form her parent in Iran. Her parent > was an Iranian and not a resident or citizen of United States. She is > American citizen. She paid the inheritance tax in Iran, sold the house > and brought the proceeds To United States. She is wondering whether > that 1,000,000 exclusion for inheritance tax will apply to her. If not > how is going to report the sale proceeds in her tax return? No US estate or inheritance tax is due. She reports the sale on Schedule D of her 1040. The basis is the property's fair market value as of the parent's date of death, and it's long-term since the property was inherited. See IRS Publications 550 and 551. Phil Marti Clarksburg, MD -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by removeps-groups@yahoo.com on September 4, 2009, 4:38 pm Please log in for more thread options > > My sister-in-law inherited a house form her parent in Iran. Her parent > > was an Iranian and not a resident or citizen of United States. She is > > American citizen. She paid the inheritance tax in Iran, sold the house > > and brought the proceeds To United States. She is wondering whether > > that 1,000,000 exclusion for inheritance tax will apply to her. If not > > how is going to report the sale proceeds in her tax return? > > No US estate or inheritance tax is due. She reports the sale on > Schedule D of her 1040. The basis is the property's fair market value > as of the parent's date of death, and it's long-term since the > property was inherited. See IRS Publications 550 and 551. Should she file a form 3520 to report a gift from a foreign person? If you receive a gift of more than $100,000 from a foreign person, you must report the existence of that gift on form 3520. No tax is due. However, failure to report the gift triggers a penalty of up to 25% of the gift amount. See http://www.irs.gov/businesses/article/0,,id=200722,00.html. The instructions for form 3520 at http://www.irs.gov/instructions/i3520/ch01.html#d0e130 mention a penalty of up to 35%. The inheritance may itself be considered a gift. I guess the IRS has the rule to track money laundering, or who knows what? -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on September 4, 2009, 5:13 pm Please log in for more thread options removeps-groups@yahoo.com wrote: > >>> My sister-in-law inherited a house form her parent in Iran. Her parent >>> was an Iranian and not a resident or citizen of United States. She is >>> American citizen. She paid the inheritance tax in Iran, sold the house >>> and brought the proceeds To United States. She is wondering whether >>> that 1,000,000 exclusion for inheritance tax will apply to her. If not >>> how is going to report the sale proceeds in her tax return? >> No US estate or inheritance tax is due. She reports the sale on >> Schedule D of her 1040. The basis is the property's fair market value >> as of the parent's date of death, and it's long-term since the >> property was inherited. See IRS Publications 550 and 551. > > Should she file a form 3520 to report a gift from a foreign person? > How this gets reported depends upon whether she took title to the property and sold her own capital asset or whether it was sold by the "estate" or some other Iranian entity and the proceeds distributed to her. If she took title and sold it, then Phil Marti's answer is how she reports it (Schedule D). No 3520 need be filed. If she never took title and merely received the proceeds, then she completes the 3520 and no Schedule D is required. Lastly, if the funds were first deposited into a foreign account in which she had a financial interest in or signature or other authority over, then she also needs to file a TD F 90-22.1. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by D. Stussy on September 4, 2009, 5:26 pm Please log in for more thread options > > > My sister-in-law inherited a house form her parent in Iran. Her parent > > > was an Iranian and not a resident or citizen of United States. She is > > > American citizen. She paid the inheritance tax in Iran, sold the house > > > and brought the proceeds To United States. She is wondering whether > > > that 1,000,000 exclusion for inheritance tax will apply to her. If not > > > how is going to report the sale proceeds in her tax return? > > > > No US estate or inheritance tax is due. She reports the sale on > > Schedule D of her 1040. The basis is the property's fair market value > > as of the parent's date of death, and it's long-term since the > > property was inherited. See IRS Publications 550 and 551. > > Should she file a form 3520 to report a gift from a foreign person? An inheritance is not a gift. Form 3520 does not apply. A gift is a voluntary transfer. Death often isn't voluntary. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Money transfers from Foreign country December 30, 2007, 10:54 pm Medical Expenses Incurred In Foreign Country April 14, 2009, 11:27 pm Working in a foreign country, paying into social security. August 29, 2008, 3:29 pm H1B Visa - First Year in Country 2007 March 23, 2008, 11:36 pm Arizona - form 309 taxes pain to another state or country ? March 18, 2009, 6:45 pm IRS Form 3520, Section 679 IRC - what is a "foreign trust"? Not a foreign partnership, right? July 25, 2007, 6:22 pm Foreign Earned Income Exclusion & Foreign Tax Credit May 21, 2008, 9:29 am Foreign Income Exclusion vs. Foreign Tax Credit March 25, 2007, 12:07 pm Foreign Tax Credit & Foreign Income Exclusion June 3, 2008, 9:35 am EIC affected by SS received? March 10, 2008, 8:16 pm