My husband died in Uruguay in 2022. Both of us are US citizens and permanent legal residents of Uruguay.
Under Uruguayan law, a part of his Uruguayan assets go to his son, a US citizen and US resident.
Since his son has no need for half a house in Uruguay, we planned for me to buy his interest in the house. We are currently STILL working with an attorney as to how to do this without his son having to travel to make it happen. It will end up with either I buy half the house or I buy his inheritance rights. The money for the purchase will be sent from a long established US bank account to his son's US bank account.
For US reporting and taxation, does it matter whether I buy his half of the house or his inheritance rights? I know he would have to report the sale to me on his tax return but would it be considered real estate or something else if I buy the inheritance rights? A small part of his inheritance would be his share of bank accounts.
Basically - He inherits USD 20K in cash and $100K in real estate from the Uruguayan estate of a US citizen. I pay him from my US bank account rather than do a USD 120K wire transfer to my Uruguayan account and then wire the USD 120K to him back in the US.
What is the reporting? I don't see anything other than Sched D for the sale of either the real property (assuming they INSIST on putting it in his name first) or his inheritance.
Thanks!
