Foreign Inheritance FBAR Reporting is one of the most common issues among U.S. taxpayers with foreign parents, uncles, aunts, siblings and other relatives. The issue discussed in this article is not reporting foreign inheritance itself (although this is an important concern which I already addressed in other articles), but whether FBAR needs to be filed upon the receipt of a foreign inheritance. Let’s explore this subject in more detail.
Foreign Inheritance FBAR Reporting: What is FBAR?
The Report of Foreign Bank and Financial Accounts, officially now called FinCEN Form 114 and also known as “FBAR”, is one of the main U.S. international tax requirements for reporting bank and financial accounts overseas. FBAR should be filed by every U.S. tax resident who has foreign financial accounts the aggregate value of which exceeds $10,000 at any time during the calendar year. The aggregate value should be calculated on all foreign bank and financial accounts in which this U.S. tax resident has financial interest or over which he has signatory or other authority.
The 2015 FBAR must be received by the IRS by June 30, 2016 without any extension possible; however, starting the reporting for the calendar year 2016 (i.e. 2016 FBAR) the FBARs are due on April 15 (an extension is possible).
Foreign Inheritance FBAR Reporting: Foreign Bank and Financial Accounts
A foreign inheritance may be received by a U.S. heir in a great variety of forms: cash, bank accounts, investments, business ownership, real estate, a foreign trust beneficiary interest, jewelry, art, intellectual property, et cetera. For the FBAR reporting purposes, it is important to understand exactly what the U.S. heir in inheriting.
Foreign Inheritance FBAR reporting becomes relevant when a U.S. heir receives either financial interest in or signatory (or other) authority over any foreign bank and financial accounts. It is important to emphasize that, no matter how brief is this financial interest or signatory authority, the foreign inheritance FBAR reporting will come into play as long as the aggregate value of all accounts exceeds $10,000.
I often see that U.S. heirs would set up foreign accounts in which foreign inheritance is deposited and they would believe that such accounts would not be reportable because they are simply depositing foreign inheritance. This is incorrect – as soon as foreign accounts are involved, foreign inheritance FBAR reporting considerations immediately become relevant whether these are inherited foreign accounts or accounts which are set up to receive the inheritance.
Contact Foreign Inheritance FBAR Lawyer for Professional Help
If you received a foreign inheritance, you need to contact Sherayzen Law Office as soon as possible for professional help. Mr. Sherayzen has successfully advised hundreds of U.S. taxpayers with respect to U.S. tax compliance foreign inheritance issues. He can help You!