Deductions & credits

Nothing changes tax wise ...

 

  • A dear family member passed and according to the will left me an inheritance. These funds are currently in their (to be liquidated) foreign bank account in foreign currency. Amount is low 6 figures when converted to USD.  An inheritance of cash from anyone or anywhere is not reported on an income tax return.
  • I would like to transfer this foreign money to my US investment account. How do I report this correctly and what taxes will I owe to the IRS for this transfer?   Again a transfer from one bank account to another  is not reported on an income tax return in any fashion  however if the money earns income like interest that is taxable.  

 

FBAR requirements : 

 

A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.

 

A person who is required to file an FBAR and fails to properly file may be subject to a civil penalty not to exceed $10,000 per violation. If there is reasonable cause for the failure and the balance in the account is properly reported, no penalty will be imposed. A person who willfully fails to report an account or account identifying information may be subject to a civil monetary penalty equal to the greater of $100,000 or 50 percent of the balance in the account at the time of the violation. See 31 U.S.C. section 5321(a)(5). Willful violations may also be subject to criminal penalties under 31 U.S.C. section 5322(a), 31 U.S.C. section 5322(b), or 18 U.S.C. section 1001.

 

You must file the FBAR electronically through FinCEN’s BSA E-Filing System. You don’t file the FBAR with your federal tax return.

If you want to paper-file your FBAR, you must call FinCEN’s Resource Center to request an exemption from e-filing. See Contact Us below to reach this resource center. If FinCEN approves your request, FinCEN will send you the paper FBAR form to complete and mail to the IRS at the address in the form’s instructions. IRS will not accept paper filings on TD F 90-22.1 (obsolete) or a printed FinCEN Form 114 (for e-filing only).

 

If you want someone to file your FBAR on your behalf, use FinCEN Report 114a, Record of Authorization to Electronically File FBARsPDF, to authorize that person to do so. You don’t submit FinCEN Report 114a when filing the FBAR; just keep it for your records and make it available to FinCEN or IRS upon request.

 

Turbotax does not offer the form so you may want to consult with a tax pro.