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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3282
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I've inherited property valued about $300,000 and will soon

Customer Question

I've inherited property valued about $300,000 and will soon receive a cash inheritance of about $150,000 from a foreign relative. Will I owe taxes on any of this inheritance? Should I be concerned about the IRS flagging the international bank transfer of the cash inheritance in any way?
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you today.

If you receive a gift or inheritance from a foreign person (nonresident alien) or from a foreign estate and the total amount during the year exceeds $100,000, you are required to report the gift on Form 3520.

http://www.irs.gov/Businesses/Gifts-from-Foreign-Person

Usually, receipt of gifts is not taxable.

If you inherit property, when you sell the property you will report the sale and pay any capital gains tax that may be due at that time. You will want to make a note of the FMV of the property on the date of death and will use that as your basis when you sell. You will pay capital gains tax on the amount that is the difference between the selling price and the FMV at time of death. For example, if the property was worth $150,000 at the time of death and you sell the property 3 years from now for $200,000, you will pay capital gains tax on $50,000. Likewise, if the property was worth $150,000 at the time of death and you sell the property within a month for $150,000, there would be no gain.

The following link contains information you will find helpful:

http://kaufmann-cpa.com/FAQ/foreign_inheritance_gifts_faq.html

Please let me know if I can assist you further.

Best regards,

Barb

Expert:  Barbara replied 1 year ago.

Just following up with you to see if you have any other questions or concerns. If so, please come back to me here at your convenience, and I will be happy to assist you.

Best regards,

Barb