@DocNyr ,
As I understand the situation -- 1. you and your wife are both US persons ( citizen / Green Card /Resident for Tax purposes); 2. You both live in the USA and have been here for the whole of 2021; 3. You file jointly - MFJ; 4. Your wife inherited some stocks with a fair market value ( at the time of death of the decedent ) of US$190,000; 5. She has also received dividends from the said stocks of US$4300; 6. There is no informational return for the dividends -- just the receipt notice from the brokerage and the funds deposited to your joint bank account ( in the US or UK ? ). Yes ?
Here you have at least three items to consider:
First the easy one -- the treatment of the dividend: Because of the absence of the form 1099-DIV, you have to follow the suggestions listed earlier -- you report just like it was received from a US entity but with missing 1099-DIV. You tell TurboTax you have dividends to report --- ordinary / total dividend of US$4300. If you paid foreign taxes ( HM taxes ) then you can use the safe harbor ( hopefully) to claim that tax as a credit against the tax on the dividend income. As suggested use a dummy 1099-div to fill out , so filling out for TurboTax is facilitated.
Second : The treatment of the inheritance.
(a) You report this on form 3520. Here is a reference on this :>> https://www.irs.gov/forms-pubs/about-form-3520. There is no tax consequence now. However, you are establishing your basis in the asset on 3520. So when she sells the asset, her gain would be based on this basis value -- so you need to keep record of this ( IRS generally will use form 3520 for this ).
Note that this is reported as received by your spouse but on a joint return. The ownership generally is your wife's unless the state laws require it to be regarded as a marital asset and therefore jointly owned.
(b) Because this is a foreign asset ( the stock so owned is not traded in the USA, held in a brokerage account abroad -- not a foreign branch of a US brokerage ) it comes under FATCA regulations -- here is more on this --->https://www.irs.gov/businesses/corporations/do-i-need-to-file-form-8938-statement-of-specified-forei...
So you do have to report this on form 8938. TurboTax will walk you through this . There is no tax consequence.
(c) If you own or have signature authority over one or more accounts in a financial institution ( bank or a brokerage cash account) then these come under FBAR purview --- the threshold is US$10,000. If in doubt take the easy path a file FBAR form 114 at www.fincen.gov.
Note this is separate from your tax return -- does not go to the IRS. Here is more on this --> https://www.fincen.gov/sites/default/files/shared/FBAR%20Line%20Item%20Filing%20Instructions.pdf
Thus to your questions what forms to file -----1. form 3520 to report the receipt of inheritance; 2. form 8938 to report the holding of foreign asset in a foreign financial institution / brokerage. These are with your return and therefore using TurboTax. 3. you may also have to report FBAR at www.fincen.gov , depending on facts and circumstances -- not because of the inheritance itself or the ownership of foreign assets/ stocks.
To your question on reporting foreign dividends ---- use TurboTax to report dividends as if you had a 1099-div as discussed earlier. May have to take credit for taxes paid to HM ( if ).
Does this cover your queries ? Is there more help you need ?
To your last questions/ comment in the post script ---- this is tax code designed by committee whom are beholden to all and sundry interests -0- hence the compilations. No respite in sight.
pk
