Yes, let's answer these questions one at a time.
- Starting with the simplest question, Part 1V would be the only section you would complete unless the distribution was made from a foreign trust. Occasionally, foreign assets may be placed in a foreign rust account by an individual to protect the inheritance and if this is the case, then you would fill out part 3. If the assets were inherited directly through the deceased father, then only Part 1V would be filled out.
- Doesn't need to be a detailed description. Just a description that identifies the asset inherited and the FMV.
- There doesn't seem to be a clear precedence for this with the IRS. But since you first received this inheritance, I would suggest reporting the full inheritance. Form 3520 states that you are to report the property received in the inheritance and does not account for any transactions that occur after the inheritance. You will not deduct any costs or taxes related to the inheritance. Just remember this form is informational only.
- According to FenCen114 requires that an FBAR be filed if the combined balance of all the foreign accounts you own or have a financial interest or signature authority is more than $10,000 at any point during the calendar year. This means if you gained the financial control over the asset before closing it, then it must be reported regardless how long the account remained opened before closing.
- This is a good question. According to Part 1V instructions, the amount reported on form 3520 is exempted and you do not report these on Form 8938. Here it gets murky. My suggestion is to file the form, even if your previous account balances are below the threshold, then indicate on Part 1V that you have filed form 3520. If Turbo Tax kicks this out and claims that the form does not need to be filed because it is below the reporting threshold or if the form is not included in your return then ignore it. i only suggest that you attempt to report so that you can rest assured you are in full compliance of your reporting responsibilities.
Hope that this helps and don't hesitate to reach out to us if you have additional questions. Here are additional resources that support my answers.
FBAR Reporting Requirements
8938 Instructions
3520 instructions
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
