If foreign property has multiple owners with specific percentages and one of them dies, the defunct person's portion is potentially inherited by multiple heirs with varying percentages of that piece. If some of those are US citizens, is the specific percentage for the specific person what is used for calculations when it comes to all the forms and thresholds?
Sorry about not being clear as I am not familiar with the topic. I understand there may be different forms required when it comes to foreign property. Are those forms completed based on the filer's percentage ownership when it comes to value, sales or other numbers required to be filled? This really would be the same for thresholds and understand why confusing in my question. In some places I've seen mention of requirements in reporting foreign assets in certain forms if over certain amount which is why my threshold reference.
@jtaxuser , having read through your original post and subsequent explanations, I am still not sure quite sure what the issue / question here is. I state below what I understand of the scenario:
(a) An foreign asset -- realestate-- was acquired by multiple persons through inheritance.
(b) One of the original owners passed and therefore his/her progeny ( some of whom are US persons ) have now become owners of the original share of the decedent.
(c) so now the questions is how do the US persons report this acquisition to the US authorities
Please correct my understanding. But if my above understanding is correct then for the US person's
1. recognize the FMV of the asset ( i.e. the portion belonging to the US person) -- FMV on the date of demise of the decedent. This becomes the basis of the asset or share thereof for this US person.
2. If the value of the asset is more than US$100,000 , the US person is required to file a form 3520 declaring/recognizing the acquisition. This is information filing only --there is no tax consequence.
3. This being real-estate, there is no FBAR ( FinCen form 114 ) or FATCA ( IRS 8938 ) filings either .
Note that if the asset is only a share in an entity, there may be other things to consider depending on the type of entity ( trust, fideocomiso, company, corporation Ltd. Gmbh , SA, etc.. etc.) and also the country under whose laws the trust/entity is organized ( tax treaty implications). It will get even more complicated if the entity is organized under the laws on one country but the asset is held in a different country.
So please provide more info on the actual situation , type of asset . use , country wherein, type of entity managing the asset etc. etc.
Does this answer your question or am I in the left field .