Background
My Canadian uncle passed away and left me an inheritance. The money is being held (and is generating interest) in a bank account in Canada (probably in the name of the estate). Once Revenue Canada issues a clearance certificate, the portion of the inheritance that my uncle wanted me to have will be distributed to me. I asked the company acting as the executor to wire it to my US account when that time comes.
A few months ago, I received a NR4 listing the interest that was generated during 2024. I did not actually receive it yet since the inheritance has not yet been released, I assume that the interest was just kept in the estate bank account so that when I do get my distribution, it will include that interest.
Questions
Have a hard time with this
(a) You say the executor has not distributed the funds , awaiting clearance from the authorities and at the same time you have received an NR-4 ( which as I see the form) is notifying that an amount of funds/interest has been credited to the account of a Non-Resident.
(b) You say have no knowledge of the actual/final amount to be distributed nor how the monies are held -- in individual accounts or ( more likely in the name of the Estate ).
Strongly suggest that you contact the executor to understand the situation.
From the NR-4 , ( and assuming that it is ONLY in your name ), it seems that
1. you have an account in your name , and where the monies are sitting --like a suspense account or escrow account,
2. Interest earnings for the monies in this/that account is being recognized.
3. It is just awaiting some conditions to be filled before being released to you.
(c) IMHO, this qualifies as constructive receipt esp. since Canada Tax authority ( and you ) are being informed through NR-4. Thus you need to recognize this interest earning on your return.
Cannot comment on whether this type of account comes under FBAR and/or FATCA regs. mostly because you have no control/signature authority/ over the account. Note that depending on the quantum of the distribution, there may be need for you to file a 3520 for tax year when the funds are released to you. See here --> About Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts | Internal Revenue Service
Is there more I can do for you ?