What are the tax implications on receiving an inheritance from non-U.S. parents living in a foreign country?

Question

My mom passed away about a month ago in Romania and I inherited an apartment. I sold the property 5 days after my mom passed way. I've already paid a sales tax in Romania. Do you have to pay IRS tax on the inheritance once i wire transfer the money from Europe to the US? Please Help..Thanks

Answer 1

No, there is no Federal tax on inheritance. A few states still have an inheritance tax so you'll have to check with your state on that.

There are Federal reporting requirements on the funds brought in to the country. Download IRS Form 3520 and its instructions from the IRS website. You'll report this in Section IV. This is ONLY a reporting requirement and does NOT trigger any tax.

Answer 2

I'll take a shot at this one, but I'm just a layman on estate tax issues, so please consult with your tax advisor if there are large dollars at stake.

First, the U.S. estate tax is a liability of the decedent's (deceased person's) estate. There is no "inheritance tax." That means that it is not the heir who owes the tax. Unless your mother was a U.S. citizen or permanent resident, I don't think the U.S. government has any jurisdiction over this estate. Without jurisdication, the U.S. would be unable to impose a tax.

Next, assuming the U.S. has jurisdiction, how much is the apartment in Romania and everything else in your mother's estate worth? For 2007, the estate tax exclusion is $2 million. That is, unless the estate minus all liabilities is worth more than $2 million, there is no estate tax liability. Now, if your mother made taxable gifts (generally gifts greater than $10,000 in one your for most previous years), then the $2 million exclusion would be reduced.

So, I see two reasons why there would probably be no U.S. estate tax on your mother's estate. But, if a tax were due, the liability would not be affected by your wiring to the US. That is, if estate tax applies, it would be taxable even if you didn't bring it back to the US.

Answer 3

shop it offshore, in any different case youre going to get taxed for it, maximum suitable thank you to do it to convey it in united states is to do somewhat tax avoidance, im analyzing accounting and so could desire to represent which you convey a small quantity out each and each month or so, and supply it as a present to a relatives member or companion, this covers tax, as giving money or assets to a companion doesnt parent tax. additionally you may desire to attempt putting the money into investments at present alongside with assets, because of the fact it counts as capital effective factors, of which tax is decrease and you're under thresholds. in basic terms pay attention for the tax guy in case you attempt to convey the lot in at as quickly as.