Form 3520 for gifts - how to report inheritance from a single doner's multiple bank accounts, and jewelry/furniture

[vb6545]

Hi,

A foreign relative passed away in 2022, and left me money in some bank accounts as well as jewelry, furniture, etc..  As a beneficiary (similar to a POD) on my relative's bank accounts, I could claim the money by closing out many of the accounts, and having the bank deposit the proceeds into my new foreign account.  For form 3520 part IV, line 54:

1. Do I need to list each bank account belonging to the deceased separately on 3520 line 54?  If so, what do I put in as the "Description of property received?"  Do I list the bank name and account number or something else? Money was received from different bank accounts on different dates.

2. For the 3520 due April 15, 2023, I assume that I only need to report the money I received in 2022, and not amounts received in 2023, or amounts in accounts that I have not been able to claim yet.  Correct?

3. Does the fair market of furniture and jewelry need to be reported as a gift on the 3520?

The total amount of the inheritance received in 2022 itself does exceed the $100k threshold.  So, I do need to submit a 3520 for 2022.

Thank you.

[DaveF1006]

According to instructions for the 3520, you do not need to file a 3520 unless you receive more than $100,000 from a non-resident individual or a foreign estate. However there are other reporting requirements.

Now that are now the proud owner of new bank accounts you need to do the following.

1. There is a FBAR reporting that requires you to report all foreign accounts that exceed $10,000 during a tax year. If this is you, you have this requirement. Turbo Tax does not handled this type of reporting but you can go directly to this website and report this.
2. There is also what is called a FATCA reporting requirement that is handled by Turbo Tax.  This is required if your foreign accounts exceed $50,000 during the year. Here is how to access.

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

You do not need to report the value of your furniture since you do not need to report the gift on a 3520. Also, if you have FBAR and FATCA filing requirements, you would only need to report the value of your foreign accounts in 2022.

Next year, depending on the amounts of the gifts, you may have a 3520 filing requirement if the value received in 2023  are over the threshold amounts previously listed. There may be a FBAR and FATCA filing requirement if the value of your accounts are over the threshold amounts for FBAR and FATCA requirements listed above.  

Let us know if this helps.

[vb6545]

Thank you for the info.   Yes, I do need to file a 8938 and 114 as well.   However, since the inheritance amount from the bank accounts is well over $100k that I received in 2022, I do need to report the gift on form 3520.  But, I am not sure how to exactly report these on the 3520.  

[DaveF1006]

This is a revision from a previous post.  You will report the amounts of the inheritances as gifts if the threshold amounts are over $100,000. As you mentioned there is also 8938 and FBAR reporting that is required.

{Edited 02/27/2023} 3:36 PM PST} @vb6545

[vb6545]

@DaveF1006  You are correct that an inheritance is received after death.  However, the IRS treats inheritances as a gift for the 3520, and a 3520 is required if it's from a non-US person and over $100k.   Several web-sites cover this.  

[DaveF1006]

Yes, I was reading and basing my opinion from this IRS link. In this link, it never specifically addressed the term inheritance but instead mentions the word bequest. Not all inheritances are bequests but in this case, you are correct in stating this should be reported on a 3520, especially if it was part of a foreign estate or specified in a will.

My apologies on my original answer and thank you for pointing this out to me. I really appreciate it.

@vb6545 

[KenWalking]

This question was not answered, and I would really be interested in the answer. 

1. Do I need to list each bank account belonging to the deceased separately on 3520 line 54? If so, what do I put in as the "Description of property received?" Do I list the bank name and account number or something else? Money was received from different bank accounts on different dates.

Over $100,000 in inheritance - check

Multiple bank accounts - check

How to report -  don't know

[DaveF1006]

No. Line 54 is to report foreign assets and their description. Here you can describe this as a foreign Bank Account, the date of the gift and it's value.  You don't need to give details on the account such as account numbers or Bank's name.

You do need to list every account you received as a gift. If you have more than three accounts to report, you will need to add a separate statement to the 3520. This statement should list each account, the value, and the date of the gift.