1. Yes. Form 3520 since the donor was a "non-resident alien" (NRA), any gift or inheritance exceeding $100,000 must be reported in Part IV. This is generally due at the same time as their income tax return (April 15), including extensions.
2. Yes. If the total for all their foreign accounts exceed $10,000 at any point during the year, they must file an FBAR.
3. Form 8938 -the IRS has tightened up on filing the form.
- No need to file IF the only assets are on the Form 3520 and below the filing threshold.
- Yes need to file IF total value threshold (typically $50,000 on the last day of the year or $75,000 at any point for single filers living in the US, double for married filing joint) is met.
If they meet the threshold to file Form 8938, they would:
- Complete the identifying information at the top.
- Go to Part IV (Excepted Specified Foreign Financial Assets).
- Enter "1" next to Form 3520.
- Leave Parts I, II, and III blank (assuming the bank account is the only asset they have). The house is not a foreign financial asset for this purpose.
Since this is estate related, there could be additional reporting requirements if the estate held the assets and earned interest. Form 1041 is used for estates and 3520-A may be needed as well.
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