My dad is still alive and he wants to inherit me some money in life. He lives in Nicaragua and he is nicaraguan (not a US citizen or anything). Do I have to report this money to the IRS?
Do I have to pay money on this inheritance?
Thank you
2007-07-29 14:16:21 · 5 answers · asked by JC 1 in Business & Finance ➔ Taxes ➔ United States
What your dad would be giving to you would be a gift, not an inheritance. A gift is given while the person is alive, an inheritance is after the person is deceased. You would not pay taxes either way though. A gift is never taxable to the person who receives, and the same way with an inheritance as well. Depending on how much money is involved in getting the gift from your father there is a form, Form 3520, you might have to fill out for receiving monies from a foreign person. I have attached an article that talks about when you need to fill out form 3520.
Luciana is not correct. Gifts are not taxable to the person who receives the gift, so the $10,000 figure she has quoted is incorrect.
2007-07-29 14:40:32 · answer #1 · answered by Anonymous · 2⤊ 0⤋
It is my understanding that any income you receive whether it is inheritance or otherwise, within the country or from out of the country, you have to pay inheritance tax on this money. If I were to receive an inheritance or any type of money from overseas, I would put my money in a Swiss account as a Nicaraguan citizen, this way it is not reported to the United States, (as of now, Switzerland has agreed to disclose any monies kept in Swiss Banks from Americans), and I would use a credit card to pay my debts from that account. If you leave the money in Nicaragua, knowing Nicaraguan politics, your money may or may not be at risk--why take a chance. By the way, you only have to pay taxes on monies above $10,000.00, anything under this amount can be a non taxable gift. However, I would strongly suggest checking with a tax attorney, this amount could be higher.
I hope this helps. Let me know what you find out.
2007-07-29 14:35:44 · answer #2 · answered by Luciana 1 · 0⤊ 2⤋
No receiving gifts or inheritence isn't taxable in the USA. If he were American he would file a gift tax return but still might be under his lifetime limit to avoid tax. His estate would pay any estate taxes not the people he left money to. Since he isn't American I don't know what it will cost him in Nicaragua.
2007-07-29 14:21:47 · answer #3 · answered by shipwreck 7 · 0⤊ 0⤋
There is no inheritance tax federally, and only a very few states have one. An inheritance is not income, but may be counted for purposes of her housing. She can't avoid that.
2016-04-01 08:50:06 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Luciana is completely WRONG!
2007-07-30 02:47:43 · answer #5 · answered by Anonymous · 0⤊ 0⤋