[Denisekisten]

I was resident abroad. Am in SA for the past 5 years. I inherited paintings from Italy. Some of the paintings was sold abroad.The money is in an account abroad. What do I pay tax on? What are the capital gain tax implications

[wnhough]

QUOTE," The money is in an account abroad.What do I pay tax on?"---If you are either a US citizen or a resident alien (either under the US Tax Code or US INS Rules),if you have a financial interest in or signature authority or other authority over any financial account abroad, and if the aggregate value of your personal bank account abroad exceeds $10,000 at any time during the calendar year, then you MUST file FORM TD F 90-22.1 with the IRS by June 30 of next year. This means that assume that the balance inyour account in July was $4,000 and in September, the balance was $10,500, then you must file the form;$10,500 in September>$10,000. REMEMBER;" Failure to file an FBAR when required to do so may potentially result in civil penalties up to $500,000 , I guess, criminal penalties or both. If you learn you were required to file FBARs for earlier years, you should file the delinquent FBAR reports and attach a statement explaining why the reports are filed late. No penalty will be asserted if the IRS determines that the late filings were due to reasonable cause. Keep copies of what you send for your records."(Once you pay taxes on the interest income earned from the account abroad to the foreign taxing authority, then you can get tax credit on the tax liaiblity overseas under the tax treaty between US and the foreing nation.
I do not know if you being them into the US from abroad however, assume that you bring'em into the US and if the amount exceeds $100,000, then you must file the FORM 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, just for info. Return puirposes.
In general, if the amount of money coming into the US from abroad via wire transfer( into your bank account in US) exceeds $10,000, then your bank will report the amount to the IRS( US Treaury Dpt).That doesn't mean to pay any form of taxes on the money transferred into the US from overseas.Federal law requires that all banks report any cash deposits made in excess of $10,000 in the hopes of discouraging money laundering, rather than tax evasion. "wires" from abroad require the same information.

"What are the capital gain tax implications "---As either a US citizen or a resident alien , you are taxed on your US and worldwide income. You can claim the Capital Gain taxes paid to foreign taxing authority on your federal tax return in US, but you still must pay state level CG tax to your State government.
Pleae visit the web site for further info.;http://www.ustreas.gov/offices/tax-p...rary/italy.pdf