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Is inheritance income from Germany subject to US taxes?

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Is inheritance income from...

Is inheritance income from Germany subject to US taxes?

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Stand to inherit a relatively large amount from the death of my step-sister in Germany. The matter is handled by a legal firm in Augsburg Germany. It has made arrangements for me to meet with a representative at the German Embassy in Washington DC to finalize some of the paperwork and have the money deposited into one of my E-Trade accounts..
Question: What are the tax ramification of my inheritance? Will I be subject to any additional taxation of the amount received, that I must report on my Income Tax? What about expenses I assume will be incurred for the services provided by the German Embassy?

Submitted: 5 months ago.Category: Tax
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12/15/2017
Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 5 months ago
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 2,312
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
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Q: What are the tax ramification of my inheritance?

A: The US does not tax inheritance or gifts from international citizens whom are not domiciled in the US and given to a US Tax payer. Therefore, you will not owe any tax. This does not apply if the funds were in a trust.

You do need to report the inheritance or gift if the amount you receive is over $100,000. You can report this to the IRS using Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. This does not apply if your inheritance is from a foreign trust.

Below is a direct link to IRS.GOV Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts

https://www.irs.gov/businesses/gifts-from-foreign-person

IRS From 3520

https://www.irs.gov/pub/irs-pdf/f3520.pdf

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 5 months ago

Q: What about expenses I assume will be incurred for the services provided by the German Embassy?

A: The expenses that you incur are not deductible.

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 5 months ago

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 5 months ago

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