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

    Jul 5, 2005, 10:47 AM
    Inheritance taxed offshore?
    I'm a Calif. US resident with UK citizenship. I'm inheriting $20k in the UK. Will it be taxed if I deposit it here in CA? If so, will it be taxed if I keep it in the UK or elsewhere offshore? Looking for best way to manage funds.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jul 5, 2005, 01:02 PM
    Kingkahuna:

    The amount of money involved ($20,000) would be exempt from any California or federal estate taxes. Further, it is likely that the British Government has already taxed it to death.

    However, if you deposit that money all at once at any financial institution, said financial institution, by law, has to report that fact to the Treasury Department. You may then be contacted by the IRS asking where you got the money. If you can document the inheritance, that will serve as adequate explanation for the IRS.

    Of course, if you can have the estate cut you three checks of roughly equal amounts, then deposit each check in a different bank/brokerage account/credit union, you will avoid the problem altogether, since the trigger amount for the Treasury Department is $10,000.
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