Inheritance taxes

[Benny]

My half sister was contacted by a law firm located in Bergan, Norway that her father's brother passed away and left all the heirs a small heritance. She checked it out and found it to be legitimate. She was told that her share would be $26,000.00. What are the U.S. tax ramifications once she receives this money? and what percentage will she owe the U.S. government in taxes on this sum ?? Thank you for your help!

 

[army judge]

Tax situations are very different for every tax payer. She should discuss this with a CPA or tax attorney. She could be taxed as high as 50%, or more.


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[Betty3]

Per my reference: Living in US & receiving a foreign inheritance --

Foreign inheritance may be taxed under the following circumstances:
The donor (the person from whom you're inheriting) is a permanent resident or citizen of the United State...In this case, the donor's worldwide estate may be taxed under US tax code.
The estate is inclusive of U.S. situs property…In this case only the US situs property may be taxed.

If one of the 2 above conditions applies, you will owe taxes on your inheritance. If neither applies, you simply need to report it for transparency.


Instead of taking it upon yourself to determine whether or not you owe taxes, you may be wise to consult with an tax professional before filing your taxes to ensure you're meeting all of your tax obligations. (as also suggested by army judge)

 

[Benny]

Thanks Betty and Judge! I told my sister that she should be prepared to pay upto 60% or more in tax, just so she wasn't shocked by any tax levy. Thanks again for your input!

 

[Betty3]

You're very welcome, Benny.

 

[army judge]

Understand, too, Benny; that that 50%ish additional tax increase applies NOT only to the measly $30K inheritance; but to her entire TAX liability.

She should seek tax advice form a CPA or tax attorney about her entire tax picture.