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Christopher B, Esq.
Christopher B, Esq., Tax Attorney
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In 2015 I received an inheritance as a one lump sum in

Customer Question

In 2015 I received an inheritance as a one lump sum in excess of 100,000 EUROS from my deceased father in Germany, money only, and still in an account in Germany under my name. I am a legal resident of the USA. What IRS forms must I use to report this inheritance?
Submitted: 2 months ago.
Category: Tax
Expert:  Christopher B, Esq. replied 2 months ago.

My name is ***** ***** I will be helping you today. Thank you for your question and for using justanswer.com.

The IRS inheritance tax requires the preparation of Form 706-CE in order to report any foreign taxes paid on inheritances received. This may have occurred when proceeds from a deceased person’s estate were received by an heir or beneficiary who resided in a foreign country at the time of death. The form facilitates the processing of a credit on the taxes of a citizen’s domestic return, in the amount of the taxes paid to a foreign country.

The IRS does not impose a federal estate tax on inheritances received from overseas or a foreign country. Most all states also follow this guidance and also do not assess an estate tax on property inherited from overseas. The IRS requires the filing of an informational return regarding the receipt of the foreign asset, which is IRS Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. The form, which does not result in a tax, is again 3520. See link: https://www.irs.gov/pub/irs-pdf/f3520.pdf

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Customer: replied 2 months ago.
Do I have to file an FBAR form and a financial asset form 8938?
Expert:  Christopher B, Esq. replied 2 months ago.

Yes, if the account remains open and you keep that amount in the account. You meet both requirements to file 8938 with the IRS and on the FBAR, you file electronically through FinCENs BSA E-Filing System. The FBAR is not filed with a federal tax return.See IRS link: https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

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Expert:  Christopher B, Esq. replied 2 months ago.

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Expert:  Christopher B, Esq. replied 2 months ago.

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