Below is a brief summary of reporting foreign accounts, gifts and inheritances. Please note that the penalties for non-compliance can be onerous.
If you inherit or receive a gift from a foreign person of more than $100k:
- Complete a Form 3520 (About Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts | Internal Revenue Service (irs.gov))
- File the Form 3520 as a Paper tax return
- Check out Andrew Schwartz’s 3-minute video on How to Report a Foreign Gift of Inheritance of More than $100k
If you have a foreign account open at any time during the calendar year, no matter how low the balance:
- Complete the questions at the bottom of the Schedule B attached to your personal return
- Check the boxes stating that you have a foreign account open, no matter how low the value
If you have foreign accounts open that exceed $10k in any calendar year:
- Complete a Form FIN CEN 114 (Report of Foreign Bank and Financial Accounts (FBAR) | Internal Revenue Service (irs.gov))
- For each foreign account, Include the name of the bank, address, account number and maximum value of each account during the year
- E-file as a separate return.
If you are married filing jointly and have foreign accounts with a combined value of more than $150k during the year or more than $100k at 12/31, or any other taxpayer with a combined value of more than $75k during the year or more than $50k at 12/31:
- Complete and attach a Form 8938 About Form 8938, Statement of Specified Foreign Financial Assets | Internal Revenue Service (irs.gov))
- File as part of your personal tax return