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Lev
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I live in Florida, I will be receiving a $16,000,000. inheritance

Customer Question

I live in Florida, I will be receiving a $16,000,000. inheritance from a foreign country. How much can I bring to my local bank account without paying taxes? If I brought all of it to my local bank, how much tax would I have to pay? Or would I be better off to put some of it in an off shore bank?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

There is no inheritance tax on the federal level and inheritance is not a taxable income for recipient regardless on the amount or a value of inherited properties.

Please see for reference - IRS publication 525, page 33 - http://www.irs.gov/pub/irs-pdf/p525.pdf

 

 

However - I want to warn you if someone is asking about the money upfront.

Normally the requirement to pay upfront taxes is used by scam artists who promise lottery winnings or foreign inheritance - so such requirements are always looked suspicious.

 

The fact of transferring the money from abroad - by itself is not a taxable event - however - you might need to report such transaction.

 

You may be required to report on the Schedule B part III that you have accounts in the foreign country if the combined value of the accounts was $10,000 or less during the whole year. See details in the instructions to that form http://www.irs.gov/pub/irs-pdf/i1040.pdf on the page B-2 (sequential page 93) There is no tax associated with this reporting - this is for informational purposes only.

 

The form TD F 90-22.1- http://www.irs.gov/pub/irs-pdf/f90221.pdf that you referenced should be filled if you have financial interest in or signature authority, or other authority over any financial accounts, including bank, securities, or other types of financial accounts in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year. This reporting doesn't constitute tax liability.

 

In case you received the money as a gift or inheritance or as a distribution from the foreign trust and - if the amount is more than $100,000, you are required to file form 3120 - http://www.irs.gov/pub/irs-pdf/f3520.pdf (see instructions for details - http://www.irs.gov/pub/irs-pdf/i3520.pdf) to declare transfer from the foreign country. There is no tax associated with this form.

 

In additional - your bank might be required to report your transaction - so I would suggest to consult with the banker if they need any supporting documents so your transaction would not look suspicious.

 

Let me know if you need any help.

 

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