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Hello,I am going to inherit between $80k-$100k from my Mother' estate in Canada. Total estate value is around $300k.There is a lawyer working on the Canadian probate, so that is taken care of. I am in CA and my brother is in TN and is in the same boat. My question is: what are the US and state tax implications for us. Thanks.
Optional Information: State/Country relating to question: United States Already Tried: I haven't been able to decipher our tax laws with regard to foreign inheritance.
You have no U.S. Tax liability, as long as none of the estate assets are located within the USA. Neither the federal government nor California taxes inheritance (i.e., the "receipt" of assets from a foreign estate). Only the "transfer" of assets is taxable, and only to the transferor. Since the transferor in your circumstance is a nonresident alien, there is no tax on the transfer, and no inheritance tax -- therefore, no tax liability.If the amount of the inheritance received is more than $100,000, you must report the inheritance on IRS Form 3520, but there is no tax liability -- it's just a report. Please let me know if I can clarify or assist you further. NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation. If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!
To socrateaser:Thank you for the answer. Just so I understand, when you say "transfer of assets" you are talking of things like real property, correct?The nonresident alien is the lawyer, or my mom? She was an expat, lived in Canada 47 years.Jackie
Assets means anything of value (cash, jewelry, real property, stocks, bonds, vehicles, furniture, artwork, etc.).The lawyer's status is irrelevant. Your facts suggested that your mother was a Canadian citizen, not a U.S. expatriate. If your mother was a U.S. citizen living in Canada, then her estate is taxable under federal law (but not California law). However, if the estate at death had a gross value of less than or equal to $5,000,000, and your mother died in 2012, then there is no estate tax, and no liability to report anything to the IRS (or the California FTB). Please let me know if I can clarify or assist you further. NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation. If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!
Experience: Retired (mostly)
To SocrateaserSorry about the mix up. First time through this. I believe I understand much better. Thank you very much for the information. Jackie
No worries. If I seemed angry that your facts led me off in a slightly different direction, I apologize, because I wasn't angry at all. I just "calls em as I sees em," and when the facts change, then so does the answer. Please let me know if I can clarify or assist you further. NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation. If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!