Form 3520 - Inheritance

[fkhalilz]

Hello,

I have a question about Part IV of the form 3520:

I have received multiple electronic wire transfers associated with my inheritance. The wire transfers were split into multiple wires due to issues that prevented one lump-sum wire transfer.  As a result, these wires have arrived within a week of one another into my account.  My questions are:

1) In Section IV, line 54 "Date of gift or bequest", should I list each individual wire transfer date, or can I simply use the first or the last one? If each wire transfer needs to be individually listed, I have more than 3 entries and they don't fit into the form. Should I simply put them on a separate sheet?

2) The wire transfers were done by a bank in another country due to the way the wire transfer company operates. How does this affect answer to question #56 on Part IV of this form?

Thank you!

[tagteam]

@pk

[pk · Accepted solution]

@fkhalilz ,   line 54  has two parts --- (a)  yes/no for multiple donors and if related  and  (b)   information about the gift itself.

  (1)   In your particular case , it was inheritance triggered by the death of the decedent  ( donor ) and therefore the gift date  is generally the date of passing or when the  Estate  disbursed the amount.  It is not the date when you transferred the amount to your US account ( generally speaking ).  So either of those dates should meet the requirements of the form 3520.

(2)  line 56 is not applicable to your since you received the amounts  from an estate of the decedent  ( not a corp. or partnership / business entity ).    Even if the decedent had put everything in a  revocable trust,  it became  irrevocable on the passing of the decedent and probably folded back into the Estate. 

So answer should be NO

You mention the monies were  wired / transferred to your US bank account   in portions to meet the requirements of local conditions / restrictions.   Here you should note that if the monies rested  even for a day  in an account over which you have signature authority, the amount may be sufficient to meet FBAR   ( form 114  at FinCen.gov  ) and FATCA  ( form 8938 )  regs, 

If you want more info on the 3520, please consider  reading through the instructions for  form 3520  -- >

2022 Instructions for Form 3520 (irs.gov)

 Is there more I can do for you ?

pk

[fkhalilz]

Thank you CHAMP for your detailed response.

Regarding part (1) of your answer below, I'd like to add that my father had passed away earlier in 2022. However, the inheritance which was a house on the market to be sold and split among beneficiaries, did not sell until 2023. Only then in 2023, the money could be wired to my account in the US. In this case, based on your explanation of disbursement of the estate, I assume the date of sale of this house is the date I should use to answer Question 54. Is that correct?

In part (2) of your answer, it seems your answer was for line 55, and not line 56. Am I understanding this correctly? I understand the answer to line 55 is "No" based on my situation.

In my original question, I wanted to know how to answer Question 56 as well. Since the wire transfer was done by a bank in another country due to the way the wire transfer company operated, how do I respond to Question 56? Reading the IRS instructions, for Line 56, the ultimate donor is my father, and not a corporation. So I am thinking to answer "No" to Question 56 as well. Is that correct?

Best regards,

Farid

[pk · Accepted solution]

@fkhalilz , both  line 55 and 56 are a  NO  for you , ---- the bank wiring  monies to you is not the owner of the amounts -- it was acting on behalf of the executor  of the Estate of your father.

Note  that based  on your reply,   (a) your father passed away on xx/xx/2022 and so the questions becomes  if the  property was  held by his estate till sale completion  OR was the property was then transferred to  joint ownership (  you along with the other  inheritors ) and then sold  .  If that is so then you have to consider this as a sale by you  and reported on form 8949 / Schedule-D --- your  sales price   and basis  are each as a share  ( e.g  if three siblings/ inheritors then Sales  price is 1/4 of the final sales price  , less selling expenses and   your  BASIS1/4 th of the total  FMV of asset at the time of demise of the decedent ).

Does this make sense ?   Is there more I can do for you ?

[fkhalilz]

Thank you very much for the clarifications!