Karen Lee Posted November 16, 2012 Report Posted November 16, 2012 Client inherited 3-4 Swiss accounts in 2012. There was no paperwork regarding these accounts (burned up by demented aunt) so my client went to Switzerland with all the documentation requested plus some. He was able to get the $ transferred to his account. What do I do now? FBAR? Income? The amount is approx $56,000. Karen Quote
BulldogTom Posted November 16, 2012 Report Posted November 16, 2012 Gifts are not income, neither are inheritances. Don't worry about the tax return. I think you need to file the FBAR. Even though client only held the account for a short period of time, I would file. I think I remember reading something about this situation, but I don't remember clearly. In any case, the client had an interest in a foreign bank account and should file the FBAR. my 2 cents. Tom Hollister, CA Quote
Catherine Posted November 16, 2012 Report Posted November 16, 2012 FBAR definitely; those rules apply if account balances go over $10K for even ONE day. The new 8xxx form; that I'd have to look up - but that one may also apply. ATX has them all, with instructions. Quote
Kea Posted November 17, 2012 Report Posted November 17, 2012 Catherine is referring to the new Form 8938. Check the instructions for your specific case. The general rule is that the form is required if the total of all foreign assets are greater than $50K ($100K if MFJ) at the end of the year or over $75K ($150K if MFJ) at any time during the year. Quote
Catherine Posted November 18, 2012 Report Posted November 18, 2012 Catherine is referring to the new Form 8938. Check the instructions for your specific case. The general rule is that the form is required if the total of all foreign assets are greater than $50K ($100K if MFJ) at the end of the year or over $75K ($150K if MFJ) at any time during the year. Yeah, that one!! I have a couple of folks it applies to but they are all good clients who come in Feb/Mar and so I had forgotten the niggly details until next sprint (um, spring; whatever). It's been a hectic day. Quote
Kea Posted November 18, 2012 Report Posted November 18, 2012 I don't remember form numbers - I look them up! But I did have to do one this year (in October - was that really just last month?). I had 2 or 3 others that had foreign accounts / assets, but they were under the limits. One client even had a large, beautiful house built in the Philippines. I thought that would trigger this form. But since it is only valued at around $70K no form required! The US dollar goes a long way in the Philippines. Quote
Karen Lee Posted November 20, 2012 Author Report Posted November 20, 2012 update: the $ were in annuities, death benefits (my client would be the beneficiary) cash out and wired to US I assume taxable at this point scenario may change with next stop by the office "Oh I have a question for you,,,," Karen Quote
kcjenkins Posted November 21, 2012 Report Posted November 21, 2012 Why would it be taxable? You started out by saying "Client inherited..." so why taxable? What did I miss? Quote
BulldogTom Posted November 21, 2012 Report Posted November 21, 2012 If I inherit a "tax deferred" account in the U.S., like an IRA, I would be responsible for the taxes. There is not enough information given by the client to be sure what they got, so I don't have a good answer. I stand by my original answer to the original post, but I don't know what to say about the new information provided. I would guess that Karen is thinking along the terms of some type of tax deferral as well, so making the assumption that there is some type of tax due on the closing of the annuity. Too many questions unanswered in the new information. Tom Hollister, CA Quote
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