Accepted Answer

Hello again esox,

There is no inheritance tax in the US. Instead, the IRS imposes estate taxes on certain estates which exceed a certain value, however, even this tax does not apply to estates of non US citizens. So you would owe no tax on the value of the inheritance itself. The only way that you would owe any tax is if you had a gain from the sale of this property. If you sold the property shortly after it was inherited, then having a gain is not likely.

When you receive property as an inheritance, you receive a stepped up basis, meaning your basis in the property is the fair market value on the date of the decedent's death. If you sell the property for more than that value, then you have a taxable gain. If you had no gain, then you owe no tax.

As far as giving the money to your daughter, this would be considered a gift. Gifts which exceed the value of $13,000 USD annually must be reported, although no tax is likely due. Each taxpayer is currently allowed a lifetime exclusion on gifts of up to $1 million. Gifts which exceed $13,000 to one person in a year must be reported by filing Form 709, but no tax would be due unless you had already used up your allowed $1 million lifetime exemption. So you would just need to file the Form 709 to report the value of the gift given to your daughter, and that will then reduce your remaining lifetime limit on gifts that you are allowed to give without paying any gift tax.

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Thank you esox

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:	7436
Answered:	10/20/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad