When do I declare my inheritance from overseas

[robingadams]

Hi my father passed earlier this year and his estate is split between 3 siblings and me.  The estate includes cash and 2 properties. We recently received probate after paying UK inheritance tax. The executors can now distribute the estate as per the will. I have just received my share of the cash ~$80,000. 
The 2 properties are still under my fathers name but can now be sold, one is up for sale the other will be sold later. So how and when do I file and forms for this , like the 3520 form.
Do I file one 3520 now showing the cash I just received and then file separate forms 3520 for each property once its sold and I get my share of the proceeds.
Or do I just file one 3520 now and indicate the estate value and my share including the property and the cash.
And then next year add the properties to my FBAR if we still have them.  (I file a FBAR annually as I have a UK bank account with more than $10,000 in it)

[tagteam]

I will page Champ @pk.

[pk · Accepted solution]

@robingadams  assuming that you are  a US Person ( Citizen/ GreenCard/ Resident for Tax purposes ), 

(a) the requirement to file a 3520  is with a threshold of US$100,000.   And it is per  tax year.  Thus  for the fgure quoted you do not have to file a 3520 for the tax year 2024 ( since the amount received in 2024 is US$80,000 )

(b) For 2025 tax year  and assuming that  your share is  US$100,000 or more , yes then you would have to file a form 3520 recognizing the  cash   inheritance.

(c) Note that  if the  landed properties  are transferred to the inheritors prior to sale and then the inheritors  do the  sale, then you would have to recognize  the sale of the property on your return  -- forms 8949 and Schedule-D-- with the gain  being taxed   (  your basis in the property would be FMV divide by the number of in heritors ).

(d) Note that any Foreign Taxes paid on Income ( Not any other  taxes ) would be eligible  for Foreign Tax Credit.

(e)  Because you have bank account ( s) in the UK  you would come under  FBAR  ( form 114 at FinCen.gov ) and FATCA ( form 8939 along with your return ).

Does this help ?   Is there more I can do for you ?