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My grand parents passing left estate worth approximately 120,000

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Turkish Lira. What process and...
My grand parents passing left estate worth approximately 120,000 Turkish Lira. What process and what tax forms do I need to be aware of when I transfer this money? Will I be taxed upon transfer and claim the money back once I file my taxes for 2012. or do I prepare the paperwork and transfer a head of time to avoid taxation? What will count as proof as this is an inheritance? What documentation is critical upon keeping my records clean? I am looking into not being taxed since this is an inheritance.
Submitted: 5 years ago.Category: Tax
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Answered in 14 minutes by:
3/1/2012
Tax Professional: Lev, Tax Advisor replied 5 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,661
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Hi and welcome to Just Answer!
If the property is given while the owner is alive - that is a gift; If however the property is transferred because of the owner's death - that is an inheritance.
Either gift or inheritance are not taxable income.

LEV :

Regardless of the value. Please see for reference IRS publication 525 page 34 (left column)- http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. Generally, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you. If property is given to a trust and the income from it is paid, credited, or distributed to you, that income is also taxable to you. If the gift, bequest, or inheritance is the income from the property, that income is taxable to you.

 

Federal estate taxes are based on if the deceased was an US citizen or if any part of the estate locates in the US. If your deceased relative was not a resident of the US and did not have any property in the US - the estate is not a subject of US tax law.

 

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.

The fact of transferring the money to the US is not reported to the IRS.

Also - be sure to consult with your banker before initiating the transfer - the bank might ask for additional information because of the large amount.

There is no specific documentation requirements - you might asked to disclose the source of funds and any documents that support your position will be accepted.

Lev
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