Family member passaway, inherit money from abroad, Form 3520?

[onemoment]

Hello,

My family member passed away in 2021 outside the US. I traveled home in 2021 and inherited some cash. There is no trust or any business entity, just individual bank account cash movements. Do I still need to fill-up the form 3520?  thank you

[KrisD15]

YES

According to the IRS:

U.S. persons (and executors of estates of U.S. decedents) file Form 3520 to report:

• Certain transactions with foreign trusts.
• Ownership of foreign trusts under the rules of sections Internal Revenue Code 671 through 679.
• Receipt of certain large gifts or bequests from certain foreign persons.

IRS LINK

[onemoment]

Thanks for your help.

If I inherited more than 10k USD cash at a foreign bank,  besides the 3520, on the foreign accounts and trust, question 7a, I should also mark Yes, then fill up the FinCEN form114?  

Do I need to fill up form 8938? Statement of Specified Foreign Financial Assets

So a total of 3 forms I need to fill up: 3520, FinCen114 and 8938?

[Vanessa A]

If I inherited more than 10k USD cash at a foreign bank,  besides the 3520, on the foreign accounts and trust, question 7a, I should also mark Yes, then fill up the FinCEN form114?  

Yes, that correct.

Do I need to fill up form 8938? Statement of Specified Foreign Financial Assets.  No, if you live in the US, there is a filing threshold for form 8939.  For unmarried taxpayers, you only need to file this form if your specified financial assets are greater than $50,000 at the end of the tax year or more than $75,000 at any point throughout the year.  The amounts for married taxpayers are higher, so $10,000 would not meet the filing threshold for form 8939. 

So a total of 3 forms I need to fill up: 3520, FinCen114 and 8938? No, just two. The 3520 and FinCen114, not the 8939. 

[onemoment]

Vanessa, 

For form 8938, the married fill joinedly threshold  is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.  I am above this amount, so I will have to fill-up the form 8938.

Since the money was inherited from my family members abroad, do I need to pay income tax on it after filling out those 3 forms?

thanks

[JohnB5677]

The inheritance is not taxable.  However, any interest dividends or other gains will be taxable in the future.

The required forms do not represent any money to be taxed but are required in the US for information purposes.

Please see the Difference Between FBAR vs 8938 Form