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Foreign Inheritance Tax Attorney Minneapolis | International Tax Lawyer Minnesota

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Receiving a foreign inheritance may open a litany of US international tax compliance obligations. Therefore, one of the first things you should do is to seek the help of an international tax attorney who specializes in foreign inheritance reporting.  If you reside in Minneapolis, Minnesota, you need to look for a Foreign Inheritance Tax Attorney Minneapolis. You will find that Sherayzen Law Office Ltd. is very likely to be the perfect fit for you.

Foreign Inheritance Tax Attorney Minneapolis: Why Foreign Inheritance is So Important to Your US international Tax Compliance

There are two main reasons why receiving a foreign inheritance may be a critical event for your US international tax compliance. First, receiving a foreign inheritance means that you have additional assets, income and transactions to report to the IRS.  The way that US international tax law works, it means that it is usually more than just one requirement is triggered. Rather, it may be a set of issues and reporting obligations that require an experienced international tax attorney to resolve them correctly. 

The multitude and complexity of issues can be fairly large: from the reporting of the foreign inheritance itself, income recognition, transfer of cash/assets to the United States to additional reporting requirements concerning newly acquired foreign assets and offshore voluntary disclosures involving prior noncompliance. You should keep in mind that noncompliance with these requirements may result in the assessment of high IRS penalties.

The second reason why a foreign inheritance is so important and so dangerous is the relative complacency with respect to and even complete nonrecognition of the potential US tax consequences of receiving a foreign inheritance with all of the multitude of issues to which I alluded above.  The problem is not just that many US taxpayers are completely ignorant of the fact that a foreign inheritance may require extensive US tax compliance. Even worse, many taxpayers erroneously but ardently believe that a foreign inheritance is something completely unrelated to the United States and should not have any US tax consequences. At best, they may focus on Form 3520 reporting while overlooking the complexity of the rest of the issues involved in receiving a foreign inheritance.

This is precisely why I highly recommend consulting an international tax lawyer with extensive experience in foreign inheritance US tax reporting, such as Sherayzen Law Office, if you have received or about to receive a foreign inheritance.

Foreign Inheritance Tax Attorney Minneapolis: International Tax Lawyer

I just mentioned that you need to seek the help of an international tax attorney rather than just a foreign inheritance tax attorney.  Why is that?

The answer is simple: a foreign inheritance attorney is first and foremost an international tax lawyer – i.e. a lawyer with profound knowledge of and extensive experience in US international tax law, particularly in the area of US international tax compliance. This means that a lawyer must be familiar with such common US international tax forms as Form 3520 (critically important for foreign inheritance reporting) and Form 8938.  He must also understand and be able to identify related US international tax compliance forms such as Forms 3520-A, 5471, 8858, 8865 cetera.  Of course, every US international tax lawyer must be very familiar with FinCEN Form 114 commonly known as FBAR.

In addition to these information returns, an international tax lawyer must be familiar with all types of foreign income reporting.  This requirement includes the knowledge of foreign rental income, PFIC compliance, GILTI income, capital gains concerning foreign real estate, et cetera.

Sherayzen Law Office is a highly experienced international tax law firm with respect to all of these income tax and information return requirements, including specifically all of the aforementioned forms.

Foreign Inheritance Tax Attorney Minneapolis: Tax Planning

It is highly prudent to engage in tax planning concerning a foreign inheritance. This is important not only for the purpose of limiting future tax burdens, but also to control future US tax compliance costs.  

Sherayzen Law Office has extensive experience in foreign inheritance US tax planning for its clients in Minneapolis and all over the world.  We also have a highly valuable experience of combining income tax planning with offshore voluntary disclosures.

Foreign Inheritance Tax Attorney Minneapolis: Offshore Voluntary Disclosures

Perhaps you learned late about your US international tax compliance requirements concerning foreign inheritance. In fact, this is a very common situation. In this case, you will find yourself in a very uncomfortable position of facing potentially multiple high IRS penalties for multiple violations of US international tax law.

For this reason, your foreign inheritance tax attorney must also have a profound understanding of the IRS voluntary disclosure options. In fact, in my experience, a discussion of a foreign inheritance often leads to the identification of past US international tax noncompliance and the immediate discussion of IRS offshore voluntary disclosure to remedy past noncompliance.

Offshore Voluntary Disclosures is a core area of our international tax practice at Sherayzen Law Office. We have helped hundreds of US taxpayers worldwide, including in Minneapolis, to bring their tax affairs into full compliance with US tax laws. This work included the preparation and filing of all kinds of offshore voluntary disclosures including: SDOP (Streamlined Domestic Offshore Procedures), SFOP (Streamlined Foreign Offshore Procedures), DFSP (Delinquent FBAR Submission Procedures), DIIRSP (Delinquent International Information Return Submission Procedures), et cetera.

Contact Sherayzen Law Office for Professional Foreign Inheritance Tax Help

Sherayzen Law Office is an international tax law firm that specializes in US international tax compliance, including foreign inheritance reporting.  We have helped numerous clients around the world with their foreign inheritance US tax compliance. We can help you! Hence, if you are looking for a Foreign Inheritance Tax Attorney Minneapolis, contact us now to schedule Your Confidential Consultation!

Foreign Inheritance Definition | International Tax Lawyer & Attorney

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Foreign inheritance definition is a topic of crucial importance for both US income and US estate tax compliance, because domestic inheritance and foreign inheritance have vastly different income tax results and reporting requirements. Hence, the topic of foreign inheritance definition directly concerns millions of Americans who reside overseas and tens of millions of Americans who have relatives outside of the United States. In this article, I will explore the foreign inheritance definition and warn against the common tax traps associated with it.

Foreign Inheritance Definition: Confusion Among Taxpayers

There is an enormous confusion right now among many US taxpayers with respect to US tax compliance requirements concerning a foreign inheritance. Some taxpayers firmly believe that a foreign inheritance is never subject to US taxation, some adopt an exactly opposite position while the rest simply do not know what to think.

It appears that the notion that foreign inheritance is non-taxable was acquired by reading various articles on the internet that state exactly this point. The people who believe that foreign inheritance is taxable also draw their conclusion from the internet – the difference arises from the fact that they read different articles. Finally, the third category of taxpayers read both kinds of articles and they simply do not know who to believe.

What is going on? Why is it that the articles on the internet seem to draw mutually-exclusive conclusions? Is one category of articles correct while the other one is one hundred percent wrong?

The answer to these questions lies in identifying the purpose for which an internet article was written, because the source of confusion lies in the foreign inheritance definition. It turns out that there are two definitions with separate applicable US tax compliance requirements!

Foreign Inheritance Definition for Income Tax Purposes

The first foreign inheritance definition exists for income tax purposes only. Under this rule, foreign inheritance is an inheritance received from a decedent who is a non-resident alien.

In this context, “non-resident alien” is defined by the IRS income tax rules. In other words, a non-resident alien is a person who does not fall into any of the tax residency categories. He cannot be a US citizen or US permanent resident; he did not stay long enough to satisfy the Substantial Presence Test; and he never declared himself a US tax resident (for example, by filing a joint US tax return with his US spouse).

Foreign Inheritance Definition for Estate Tax Purposes

A different definition of foreign inheritance applies under the US estate tax rules. Here, a foreign inheritance is defined as an inheritance received from a decedent who is a nonresident noncitizen. A noncitizen is a nonresident if he is domiciled outside of the United States. The term “domicile” here means acquiring a place to live without a present intention of later leaving. There are various factors used to determine a person’s domicile.

It is important to understand that, due to these two different definitions of a foreign inheritance, it is possible that a person could be a tax resident for income tax purposes and a nonresident noncitizen for estate tax purposes. Vice-versa may also be true.

Foreign Inheritance Definition and Tax Consequences

Now that we understand that there is a separate foreign inheritance definition for each tax regime (income and estate), we can clarify the confusion that prevails on the internet and among US taxpayers.

Generally, if the decedent was a non-resident alien, then neither his estate nor his US heirs would be subject to income taxes at the time of inheritance. I wish to emphasize here that this rule applies only “at the time of inheritance”, not before or after the foreign inheritance takes place. Exceptions may be possible with respect to foreign trusts.

On the other hand, if an inheritance was received from a taxpayer who is domiciled in the United States, then it will be subject to US estate tax rules irrespective of the country where the inherited assets are located. Of course, estate tax treaties may provide a certain amount of relief against double-taxation in this case.

If an inheritance was received from a nonresident noncitizen, then all foreign assets, except those considered as “US situs assets”, will avoid US estate taxation. The US situs assets above the exclusion of $60,000, however, may still be taxed in the United States.

Contact Sherayzen Law Office for Professional Tax Help With Your Foreign Inheritance

All of the rules that I have stated here are general, and your international tax attorney needs to apply them to your specific fact pattern in order to determine whether an inheritance fits a foreign inheritance definition for either estate or income tax purposes or both.

Furthermore, one should remember that “non-taxable” does not mean “non-reportable”. There are various income tax information reporting requirements that may apply to you even if your foreign inheritance was not taxable. Additionally, income tax recognition may be required in certain situations with respect to your foreign inheritance, especially before and after the you are deemed to have inherited your foreign assets.

Under these circumstances, the help of Sherayzen Law Office is of critical importance if you wish to stay in US tax compliance and avoid high IRS tax penalties. We are an international tax law firm highly experienced in US tax compliance concerning a foreign inheritance. We have successfully helped US taxpayers all over the globe with their foreign inheritance issues, and We can help You!

Contact Us Today to Schedule Your Confidential Consultation About Your Foreign Inheritance!