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Hello My father passed away in 2005 he left money in a corporate

Customer Question
Hello My father passed away...
Hello
My father passed away in 2005 he left money in a corporate account
overseas in Switzerland my brothers and myself were equal partners (owners)
of my fathers company however we are being audited and there is an attempt
to make it appear as though we are receiving inheritance. I would like to know
what are my rights
Submitted: 4 years ago.Category: Tax
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Answered in 37 minutes by:
6/18/2013
Tax Professional: Lev, Tax Advisor replied 4 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,663
Experience: Taxes, Immigration, Labor Relations
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LEV :

Hi and welcome to Just Answer!
If your father owned a corporation - means he owned shares of the corporation - and that what you inherited - shares of the corporation.
So you need to determine the fair market value of shares at the time your father passed away. That value is included into your father's estate - and that value would be your basis in these shares.
Since the time you took over the corporation - any income you received out of corporate profit would be your dividend income - and should be reported on your individual tax return.
A foreign corporation is a separate legal and taxing entity. As the owner of a controlled foreign corporation (CFC) - you should complete all four pages of Form 5471 and separate Schedules J and M. - www.irs.gov/pub/irs-pdf/f5471.pdf That form is attached to your tax return.

LEV :

In additional - FBAR form is needed if the total value of all foreign accounts is above $10,000. FBAR form is sent separately from your tax return.
Starting 2011 - a form 8939 is needed if the total value of all foreign accounts is above $50,000. The form 8939 is attached to your tax return.

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Tax Professional: Lev, Tax Advisor replied 4 years ago
Just in case you were not able to use the chat - I am switching to Q&A mode and porting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

Hi and welcome to Just Answer!
If your father owned a corporation - means he owned shares of the corporation - and that what you inherited - shares of the corporation.
So you need to determine the fair market value of shares at the time your father passed away. That value is included into your father's estate - and that value would be your basis in these shares.
Since the time you took over the corporation - any income you received out of corporate profit would be your dividend income - and should be reported on your individual tax return.
A foreign corporation is a separate legal and taxing entity. As the owner of a controlled foreign corporation (CFC) - you should complete all four pages of Form 5471 and separate Schedules J and M. - www.irs.gov/pub/irs-pdf/f5471.pdf That form is attached to your tax return.
In additional - FBAR form is needed if the total value of all foreign accounts is above $10,000. FBAR form is sent separately from your tax return.
Starting 2011 - a form 8939 is needed if the total value of all foreign accounts is above $50,000. The form 8939 is attached to your tax return.
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Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,663
30,663 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

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