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    kapharios's Avatar
    kapharios Posts: 2, Reputation: 1
    New Member
    		  
    #1

    May 1, 2011, 04:20 PM
    Inheritance tax from foreign country?
    I am about to receive around 100K from an advance inheritance from abroad. Although the money is a gift, the way it will be paid to me is via a wire from my parent's company directly to my bank account, and to abide to the local laws it would be considered payment of dividends. Will this money be tax liable in the US?
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
    Expert
    		  
    #2

    May 1, 2011, 04:42 PM

    These European countries have a tax treaty with US with either reduced rate or no tax at all:

    Germany
    India
    United Kingdom (UK) - Tax Treaty...
    Italy

    Canada
    Australia
    France
    China

    Your bank will have to have documentation of where the money is coming from, and the reason why, when the transfer occurs.

    Tick
    kapharios's Avatar
    kapharios Posts: 2, Reputation: 1
    New Member
    		  
    #3

    May 1, 2011, 05:30 PM
    The money is coming from a country WITHOUT tax treaty with the U.S. Will the money be taxed even though it is in reality a gift? The reason could be easily stated as "advanced inheritance". Thanks again
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    May 16, 2011, 09:43 AM
    Kapharios:

    There is NO tax liability for the transfer itself, but you WILL have to submit Form 3520 to account for the SOURCE of the funds.

    Given the facts as posted, you will have no tax liability. Just submit the Form 3520 and you will be fine.
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