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Level 1
posted Dec 23, 2021 10:57:34 AM

I am a named beneficiary for death benefits of a relative working aboard in foreign company

Question, I am the beneficiary of death benefits for a relative working aboard who was a US citizen. Do I have to file a form 3520 or any other forms since the funds are sent to me from overseas.  Any insight and how to best file taxes regarding this?

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2 Replies
Expert Alumni
Dec 29, 2021 2:46:20 PM

   It depends. You will need to file a form 3520 if the inheritance is over $100,000 and if your relative:

 

  1. Was a US non-citizen for income tax purposes.
  2. If the inheritance was distributed from a foreign trust prior to you receiving it.        

The good news it is an informational form and not an actual tax form. It is usually not considered a taxable event unless there was interest that may have accrued if it was housed in a foreign trust or account. 

 

If you aren't sure of the status of your relative, it may be safe to file form 3520 as a precaution. Please review this IRS instructional link for more information regarding filling out form 3520.  

 

[ Edited 12/29/21|03:00 PM PST]

 

@Kaidai

 

 

Level 1
Dec 29, 2021 3:50:40 PM

Thanks!, Relative was a us citizen and filed US taxes yearly  and the death benefits is over 100k USD. Regarding if it was in a trust, I'm not sure. Either way, seems the best course of action is to file the 3520.