Have a Tax Question? Ask a Tax Expert
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
Please let me know if you have any further questions and please positively rate my answer if satisfied. There should be smiley faces or numbers from 1-5 to choose from. This extra step will cost you nothing extra and will be greatly appreciated.
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
Does that answer you question completely? If so, please positively rate my answer so I can be compensated for my time by the site. Look under "rating an answer" under the following link for you to rate: http://ww2.justanswer.com/help/topics/142
Just checking back in, do you have any further questions?