When a US Citizen inherits assets from a deceased person in a foreign country, it can generate various reporting requirements that must be filed timely otherwise severe penalties can be incurred. In order of your questions:
TurboTax Schedule B interview asks about 1) control of a foreign account (line 7a), and 2) about participation in a foreign trust (line 8). You would not need to override entries on Schedule B Line 8 as it is not required to report an inheritance on this form unless you gained and maintained control of a foreign account via inheritance or established a foreign account in your own name in which case you would indicate control of a foreign account to check the box on line 7a. Some 1099B/Int forms also have a FACTA check box (more on that below). You would report any earned interest/dividends even if you did not get a 1099. Why is Schedule B particularly interested in trusts and not inheritances you ask? There have been incidences of fraud/abuse schemes developed in the past to dupe US individuals into transferring assets into a foreign grantor trust with the hopes of avoiding tax which is not legitimate.
If the inheritance amounts went to an overseas account solely to transmit the funds to your bank account in the US, the account might be considered a Correspondent or Nostro account (accounts that banks use to manage financial transactions with other banks). Therefore you may not need to consider reporting an FBAR. However, here are the other reporting requirements:
FBAR (FinCEN Form 114) is required when you have a financial interest in or signature or other authority over at least one financial account located outside the United States in aggregate excess of $10,000 at any time during the calendar year reported. The exception again being Correspondent/Nostro accounts. It must be determined if the account was held in your name but it might no hurt to file this form anyway if you're over the threshold considering the stiff penalties. FinCEN by the way stands for Financial Crimes Enforcement Network.
Form 8938 (FACTA) Sometimes referred to as the super FBAR, is required for single filers with interest in specified foreign financial assets of more than $50,000 on the last day of the tax year or $75,000 at any time during the year. Married filers have a threshold of double, $100,00/$150,000. Exception is duplicative reporting on Form 3520 including grantor trusts reported on Form 3520. The question here is if you actually had constructive interest in an account used solely for transfer purposes. Was the account in your name and did you have signatory or control authority over the account. This is something you might determine but if you're over the threshold, but it might be wise to file this form anyway. It doesn't matter how long you maintained an account in your name.
Form 3520 is required only if you as a US person received during the year $100,000 or more from a nonresident alien individual or a foreign estate (including foreign persons related to that nonresident alien individual or foreign estate) that you treated as gifts or bequests. This form is not supported by TurboTax and must be completed separately by download from the IRS or other source. It is mailed separately to a different address than where your return is mailed: IRS, P.O. Box 409101, Ogden, UT 84409. Within the TurboTax software, when you indicate that you will be filling out Form 3520, it will then require paper filing of your tax return. You can get to this input section directly without waiting for the interview screens under "Other Tax Situations > Miscellaneous Tax Forms > Prepare a Report on Foreign Financial Assets."
Part III regarding interest income pertains to a trust. Part IV pertains to transfers in excess of $100,000 of any bequests (inheritances). Completion of this section is self explanatory (date, description, FMV at inheritance date) and should be completed regardless of circumstances if you're over the minimum dollar amount.
The information that would be reported related to any of these forms would be the information related to the foreign bank account(s) and the dates and amounts while at these foreign financial institutions.
Cheers!
