I have a very unique questions and hopefully, you guys can help me with their resolutions; my mom passed away, she is EU resident. THe official heirs of her properties is me, my sister and my dad - each getting 1/3. I am the only 1, US resident for tax purposes. These rental properties have tenants and therefore real estate income and deductions attached to them. For these, prior the income tax have been paid in the EU country.
My understanding (please correct me if I am wrong), I need to file form 3520 for year 2020 and list my inheritance - or the 1/3 of the total fair value. The value is above 100K. Given this, my first question is on the fair value of the property - how is this determined? Can I hire a third party certified appraisal to obtain the FV for the properties and list them on the form? are there any requirements on the selection of such company?
My second question - if I was to sign a side agreement with my dad, and give away my 1/3 rental income rights to these properties, that is for me to NOT receive any income from these properties and for him to pay fully the EU income taxes on my tax amount - would this trigger any tax issues? Example, property rental income is 100$ per year. My 1/3 is 33$. I sign an agreement not to collect any of these money; my father collects all, or 66 (his and my 1/3). Me - 0$. I would never get these 1/3. My sister would be separate and file her own taxes.
From the top of my head, I am thinking this might create potentially gift tax issues, if the gifted income is above 15K but this could be resolved with the lifttime exemption. So, if any gift tax, i might just claim the exemption... please let me know you thoughts. or if I might be missing something.
BTW, these are properties where people do not live in; rather rented for business purposes. Thank you.
