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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 1304
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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We recieved money from an inheritance after my

Customer Question

We recieved money from an inheritance after my grandmothers death in Germany. She was a German citizen and we are American citizens. Do we have to pay taxes on it? How do we declare it as inheritance and not income? What forms do we need for tax time? We recieved documents from the estate lawyer in germany that decribe the distribution of the estate in germany.
Submitted: 8 years ago.
Category: Tax
Expert:  Mark D replied 8 years ago.

gmgrant,

The US does not tax inheritances. The estate may be subject to tax in Germany, but that would be taken care of over there by the estate. You may have to report this on Form 3520 if the distribution was from a foreign trust or considered a gift and over $100K. Please let me know if this came from a trust and the amount of the monies received. Otherwise, you would not need to report this inheritance. Please let me know if you have further questions.

Regards,

Mark D

Mark D and 2 other Tax Specialists are ready to help you
Customer: replied 8 years ago.
They dissolved the estate and distributed money to us around 33,500 euro which roughly translated to $47,000. It was put into one bank account to be distributed to the siblings. My father is worried that the bank reported the money to the IRS since it was over $10,000 and that it would be construed as income and he would have to pay taxes on it.
Expert:  Mark D replied 8 years ago.

gmgrant,

The bank may have indeed reported the transaction, but even if the IRS inquires about it, you have a valid explanation. You also have no reporting requirement. BotXXXXX XXXXXne, the IRS will most likely not come knocking, but if they do, you still have nothing to worry about. Please let me know if you have further questions.

Regards,

Mark D