Another IRS question
 

My USC wife lives/works in UK and files US taxes every year as she should.

She will be inheriting some USD from family soon.

Will this have to be declared on US tax return and will she be liable for income tax on this ?

Thanks;)

Re: Another IRS question
 

Inheritances are not taxed at the federal level, but a few states tax some inheritances.

Re: Another IRS question
 

Isn't the exemption limited to the first 5 million though? I asked my CPA last year when my Mam died, and I'm sure that was his reply. He kept a straight face as he said it, too:rofl:

Although I guess if its going to be more than that, you can afford to pay a professional rather than rely on BE;)

Re: Another IRS question
 

Is that inheritances or estates? ..... As far as I undertaken it, estates are taxed, once they reach a certain level, perhaps $5million, but the inheritances paid out are not taxed by the IRS in the hands of the beneficiary. ...... There are a few states that tax inheritances.

Re: Another IRS question
 

Hmm, good question. I think we were talking inheritances, as the Estate was UK based so out of reach of the clutches of the IRS, but to be honest, we were so far away from the figure quoted that it was a 20 second chat and move on......