Suz77
Jan 22, 2009, 06:48 AM
Good morning,
My situation is as follows: I am a legal permanent resident of the U.S. and moved here about 5 years ago. I am working, paying my taxes, etc.
My family (most notably dad and grandma, since my mom passed away) are still back home. They are both elderly and without wishing them into an early grave, I do think it's important to be prepared for when it happens.
My grandmother has been "gifting" her inheritance over the past 4 years in yearly increments which cuts down on the taxes that would normally be due as inheritance tax when she passes. In doing so she has been paying the taxes in my native country over these gifts and the money (as I understand it) is in a trust. Technically it's mine, but I don't have any control over it.
My concern is this, I know there is some law that applies to international taxes that says you can't be taxed on the same money twice. What happens when she passes? Do I own the money free and clear or would I still need to claim it as an inheritance on my U.S. taxes when that happens? Furthermore I have a bank account back home still, which is likely where the money will be deposited. The amount would be in the area of maybe E100.000, which, depending on the exchange rate, could very well exceed 120.000 USD, which seems to be a key figure.
Obviously I don't want to be caught out trying to fraud the U.S. government in any way, but I don't want to be taxed on the same money twice (first gift tax in my home country, which does away with having to pay inheritance taxes on it once grandma passes and then inheritance tax once the "gift" comes under my control in the U.S.).
My dad has made no such provisions and it would deal with a lot less money. Where do I pay inheritance taxes, back home, or over here? Or both?
Any advice? Would the best course of action be to hire a professional when the time comes? We got burned with our regular accountant who is currently serving time in jail for fraud and theft, lol.. so don't really have a steady contact at the moment to ask.
Thanks!
Suz
My situation is as follows: I am a legal permanent resident of the U.S. and moved here about 5 years ago. I am working, paying my taxes, etc.
My family (most notably dad and grandma, since my mom passed away) are still back home. They are both elderly and without wishing them into an early grave, I do think it's important to be prepared for when it happens.
My grandmother has been "gifting" her inheritance over the past 4 years in yearly increments which cuts down on the taxes that would normally be due as inheritance tax when she passes. In doing so she has been paying the taxes in my native country over these gifts and the money (as I understand it) is in a trust. Technically it's mine, but I don't have any control over it.
My concern is this, I know there is some law that applies to international taxes that says you can't be taxed on the same money twice. What happens when she passes? Do I own the money free and clear or would I still need to claim it as an inheritance on my U.S. taxes when that happens? Furthermore I have a bank account back home still, which is likely where the money will be deposited. The amount would be in the area of maybe E100.000, which, depending on the exchange rate, could very well exceed 120.000 USD, which seems to be a key figure.
Obviously I don't want to be caught out trying to fraud the U.S. government in any way, but I don't want to be taxed on the same money twice (first gift tax in my home country, which does away with having to pay inheritance taxes on it once grandma passes and then inheritance tax once the "gift" comes under my control in the U.S.).
My dad has made no such provisions and it would deal with a lot less money. Where do I pay inheritance taxes, back home, or over here? Or both?
Any advice? Would the best course of action be to hire a professional when the time comes? We got burned with our regular accountant who is currently serving time in jail for fraud and theft, lol.. so don't really have a steady contact at the moment to ask.
Thanks!
Suz