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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7266
Experience:  15years with H & R Block. Divisional leader, Instructor
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My non US citizen/resident grandfathers estate (in the Philippines)

Resolved Question:

My non US citizen/resident grandfather's estate (in the Philippines) finally being settled after 56 years of wrangling. My parents who were US citizens passed away 2004 and 2010. My cousin is handling it for me and my sister in law and basically will get some money. How do i handle it? i will probably go pick it up in person.
Submitted: 9 months ago.
Category: Tax
Expert:  Robin D. replied 9 months ago.

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.

Robin D. :

Your tax situation for the US will depend on what you actually inherit.

Robin D. :

If it is cash then you would not be taxed on the inheritance but would need to report the inheritance if more then $100,000

Robin D. :

You would do this by using form 3520

Robin D. :

If you inherited property and it was actually in your name then disposed of, you would report the sale and pay tax on any gain. Your gain would be determined by the date you inherited (that would be fair market for cost) and the differenc ein the sale amount.

Customer: No, i will not get any property in my name. It will be cash. So the only form to fill out the following year is 3520 or do i have to fill it put right away? How abt a form 702 or something like that?
Robin D. :

You do not have to use the form 709 (that is for gifts I think you might have meant that one) just the 3520 if more than $100,000.

Customer: 706 CE? No need for this form?
Robin D. :

As you will not be taxed in the US on the cash you would not be claiming a credit for any taxes paid in Philipines. The estate would not be taxed in the US as your grandfather was not liable as a non US person

Customer: Ok. 706 is for credit of tax paid on the other end it looks like but i have no clue what they are doing on the other end.
Robin D. :

Any tax there woudl be on the estate and paid prior to you receiveing

Customer: so botXXXXX XXXXXne is fill out 3520 the following year together with regular taxes? Nothing else? How abt the bank do they have to fill out something
Robin D. :

That is correct. As far as the bank, they may have their own requirements (for transfers but that is not related to tax). You woudl want to speak to your own bank first and see about having the money transferred.,

Robin D. :

If you have it in an account over there in your name then you will need to report that (FBAR)

Robin D. :

Still no tax unless you earn interest

Customer: Ok, so just file 3520 + 1040 and it is done.
Robin D. :

Correct

Robin D. :

File Form 3520 separately from your income tax return. The due date for filing Form 3520 is the same as the due date for filing your annual income tax return, including extensions. You file an annual Form 3520 for all reportable foreign gifts and bequests you receive during the taxable year.

Customer: Fbar? If i open an acct. if not i dont have to. What if i open and close it with a few days? Still have to declare?
Robin D. :

Mail Form 3520 to the following address:
Internal Revenue Service Center
P.O. Box 409101
Ogden, Utah 84409

Robin D. :

Yes

Robin D. :

about the FBAR

Robin D. :

even if you open for a few days

Customer: Oh, i was told non residents cannot open acct
Robin D. :

That could be but again I would work through my local bank

Robin D. :

they may have an affiliate there

Robin D. :

then you could have the funds transferred

Customer: Ok dokee! Thanks!
Robin D. :

You are most welcome.
Your positive rating is always thanks enough.


 

Robin D. :

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.
You will find the request feature when you come back under your MY QUESTIONS section.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7266
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 4 other Tax Specialists are ready to help you
Expert:  Robin D. replied 9 months ago.
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