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Posted by jmail7 on March 30, 2008, 3:16 pm
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> Is the tax calculation here having to account for the
> change in value from date of death to date of sale of
> the stocks? Does it also have to account for the change
> in currency exchange rates (CHF to USD)between those
> dates?
I don't deal with estates that much, but I believe the answers are:
yes and yes.
> Do I have to extract the history of stock transactions for
> that interim period, as well as all the details of
> dividends, fees and taxes, both for the stocks
> themselves and the estate related and death related fees
> and taxes? For example, debts left over from the estate
> would have been paid in that time period by sale of
> stock. This would have generated capital gain or loss.
> Is it my responsibility to resurrect all of those Swiss
> operations and report them as having US tax
> implications?
Because the assets would have had a step up in basis on the date of
death, it is likely that little gain would have been recognized on the
liquidation of the assets to pay the estate's debts. You may need to
make some assumptions. Taking a step back, the amount of income you
should recognize is the difference between the net worth of the estate
on the date of death (after estate taxes, if any), and the cash you
receive.
> Am I making this more complicated than it has to be?
Only a little.
> Is it possible that, since the inheritance is made
> available to me now for the first time, and up to now
> has been managed totally within the Swiss system,
> that the clock for basis resets to the present time?
No.
You should also be aware of Form 3520, Part IV on which you should
report the inheritance. The penalty for failing to report it can be
steep. There is also the possibility that you may need to file Form
TD F 90-22.1. Again the penalties for failing to file this form can
be large. I generally try to file this form when in doubt.
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