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I inherited a land in Korea which the government is buying

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so I will have $130000...
I inherited a land in Korea which the government is buying so I will have $130000 after Korean tax is paid off. I heard IRS does not tax this, only reporting is necessary. But is there California state tax on me?
JA: The accountant will know how to help. Is there anything else the accountant should be aware of?
Customer: Nope
Submitted: 1 year ago.Category: Tax
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Answered in 15 minutes by:
11/14/2016
Tax Professional: emc011075, Tax adviser replied 1 year ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,243
Experience: IRS licensed Enrolled Agent and tax instructor
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Hi. My name is ***** ***** I will be happy to help you.

In general, inheritance is not taxable. But if you inherited an income producing property or property that appreciated in value from the time you inherited it and sold it, you may have some capital gains.

There's no inheritance tax in California, but if you have to report any capital gains on your federal tax return, you will have to report capital gains on your California return as well.

If you paid any taxes to the Korean government and have capital gains to report, you can claim prorated credit for taxes paid to foreign government. If none is taxable, you cannot claim the credit.

And finally, if the land was held in foreign trust, you may need to include form 3520 with your return, since the value is more than 100K.

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Tax Professional: emc011075, Tax adviser replied 1 year ago

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

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