Inheritance property abroad report to the IRS and selling for under the FMV price

[Milyvarios]

Hello, I live in NC and I have a dual citizenship Peruvian/USA. In 2018 I and my brother (green card holder) inherited my mother’s house in Peru upon her passing.  My mother was a dual citizen of the US and Peru.  The house was sold in March, 2022.  Do I need to report my inharitance property and if yes how? I have read a way to report it is using form 3520 but it says it is for when the donor was a non us citizen.
Do I need to report the amount of the sale even though the sale price was under the FMV from 2018 and it was a never a rental property and last, I am planing on depositing the check  from the sale in a bank Account in Peru for only about a week because I am planing on wire transferring the money to my account in the US and it is more than $100,000.  What do I need to do about all this 3 situations in order to comply with the IRS?  Thank you so much.

[JohnB5677]

Taxes on the sale of the foreign property will be the same as if you sold the property in the US.

When your mother passed her estate was passed to you and your brother.  The house was inherited and takes on the cost bases value on the date of her passing.

If you receive an inheritance from a foreign estate or non-resident alien, or gifts from non-resident aliens exceeding $100,000 (USD), then it must be reported to the IRS. This includes the total of all foreign inheritance or gifts received.  The keyword here is the foreign estate.

If you receive an inheritance valued at more than $100,000 from a non-US person (or their estate), you will need to file IRS Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts at the same time as your individual income tax return.

TurboTax does not support IRS Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. That is a separate IRS form to be filed separately from your tax return.

Form 3250   Instructions for Form 3520

Do I have to report the sale of my home to the IRS?

If you receive an informational income-reporting document such as Form 1099-S, Proceeds From Real Estate Transactions, you must report the sale of the home even if the gain from the sale is excludable. Additionally, you must report the sale of the home if you can't exclude all of your capital gain from income.

In this case, I do not expect you to get a 1099-S, and there was no gain on the sale.  So, you do not have to report it.

If you have a foreign bank account:

Every year, under the law known as the Bank Secrecy Act, you must report certain foreign financial accounts, such as bank accounts, brokerage accounts, and mutual funds, to the Treasury Department and keep certain records of those accounts. You report the accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114.

Report of Foreign Bank and Financial Accounts (FBAR)

Can you do FBAR on TurboTax?

You don't file the FBAR with the IRS or with TurboTax. It must be filed directly with the office of Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of the Treasury, separate from the IRS. TurboTax does not file the FinCEN. Here is a link to the BSA E-Filing System.

However, you can file the 8938

To get to the 8938 section in TurboTax (requires Deluxe or higher):

1. Open or continue your return if you're not already in it.
2. Search for 8938 and select the Jump to link at the top of the search results.
3. On the Foreign Financial Assets screen, select Yes, I have foreign financial assets
4. Answer yes or no to living in a foreign country, and select Continue.
5. Answer yes or no to the amount of foreign financial assets, and select Continue.
6. Carefully follow the instructions. If you need Form 8938, we'll fill it out for you.

[Milyvarios]

Good morning and thank you so much for your response.  @JohnB5677 
1. can I still file form 3250 in my 2021 taxes since I didn’t do it back on 2018 and also even though my mom was a US citizen?

2.  Since it was no gain on the sale I don’t report the sale at all or I still report the sale on schedule D form 1040?

3. Do I report FinCEN Form 114 right away after the money gets on the foreign bank account or I wait until I file my 2022 taxes?

Thank you so much!