Avoiding tax on a money wire
#1
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Joined: Jan 2013
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Avoiding tax on a money wire
Hi Guys,
So I will be wiring over to my BOA account an inheritance from a family member.
Does anyone have any advise on making sure I avoid it being taxed ?
I called the IRS who told me to call customs.
I called customs who told me to talk to U.S bank.
I talked to my US bank who told me to consult an attorney
So I will be wiring over to my BOA account an inheritance from a family member.
Does anyone have any advise on making sure I avoid it being taxed ?
I called the IRS who told me to call customs.
I called customs who told me to talk to U.S bank.
I talked to my US bank who told me to consult an attorney
#2
Re: Avoiding tax on a money wire
There is no federal inheritance tax but only estate tax on estates of more than $5 million (wouldn't apply since the estate is from a citizen from another country). Some states tax either estate or inheritance but estate again wouldn't apply and usually inheritance taxes are prorated based on the amount received from property within that state (eg. state taxes inheritance on amounts over $1 million but all the property (over $1 million) is from another state or country so there wouldn't normally be any inheritance taxes levied by the state).
So I don't think you have anything to worry about. There are taxes due for gifts of more than $13,000 per year per individual but those are levied on the giver and not the receiver so even that wouldn't apply if the giver was a foreign citizen living in a foreign country.
So I don't think you have anything to worry about. There are taxes due for gifts of more than $13,000 per year per individual but those are levied on the giver and not the receiver so even that wouldn't apply if the giver was a foreign citizen living in a foreign country.
#3
Re: Avoiding tax on a money wire
There is no tax on the wire per se. Taxes are assessed on the basis of the tax code, and depending on your circumstances tax may, or may not, be due in the UK or the US.
Your question sounds like you are trying to avoid the IRS becoming aware of your wire, and therefore to evade any possible taxes due. To say the (very) least, this is ill-advised. If you are unable to ascertain whether taxes are due you should consult a tax accountant or lawyer, however if you already know taxes are due, I strongly urge you to declare the inheritance and cough up the tax. .... That said, inheritance tax only kicks in on multimillion dollar estates in the US.
To round out my answer, if you decided not to wire the money at all, but to leave it in an account in the UK, or to move it to another offshore jurisdiction, you would still be required to report that account and the balance on your tax return (if I remember correctly, that requirement is subject to a $10k minimum).
In short, either taxes are due or are not due, but nothing you do with a wire, or not sending a wire, has zero impact on any possible tax liability under the US tax code assuming you are a USC or permanent resident (I am not knowledgeable about any possible difference if you are in the US on a non-immigrant visa, though my guess would be there are no differences).
Your question sounds like you are trying to avoid the IRS becoming aware of your wire, and therefore to evade any possible taxes due. To say the (very) least, this is ill-advised. If you are unable to ascertain whether taxes are due you should consult a tax accountant or lawyer, however if you already know taxes are due, I strongly urge you to declare the inheritance and cough up the tax. .... That said, inheritance tax only kicks in on multimillion dollar estates in the US.
To round out my answer, if you decided not to wire the money at all, but to leave it in an account in the UK, or to move it to another offshore jurisdiction, you would still be required to report that account and the balance on your tax return (if I remember correctly, that requirement is subject to a $10k minimum).
In short, either taxes are due or are not due, but nothing you do with a wire, or not sending a wire, has zero impact on any possible tax liability under the US tax code assuming you are a USC or permanent resident (I am not knowledgeable about any possible difference if you are in the US on a non-immigrant visa, though my guess would be there are no differences).
Last edited by Pulaski; Jan 3rd 2013 at 2:18 am.
#4
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Re: Avoiding tax on a money wire
Hi,
Maybe the way I worded it but I am definitely not trying to avoid paying taxes. I was told I would or have to pay taxes and am just exploring. My options since its a large amount
Thanks for the reponses gentleman
Maybe the way I worded it but I am definitely not trying to avoid paying taxes. I was told I would or have to pay taxes and am just exploring. My options since its a large amount
Thanks for the reponses gentleman
#6
Re: Avoiding tax on a money wire
As Pulaski stated, the IRS will not seize any tax on any wire transfer unless they have already been awarded a judgment and have court authorization (garnishment award) to seize taxes from that wire or bank account.
It is your responsibility to follow the tax code and pay any taxes owed. If you don't, then you may be audited by the IRS and could have a legal battle on your hands.
However if you look into the tax code, I doubt that any money would be owed.
It is your responsibility to follow the tax code and pay any taxes owed. If you don't, then you may be audited by the IRS and could have a legal battle on your hands.
However if you look into the tax code, I doubt that any money would be owed.
#7
Re: Avoiding tax on a money wire
Unless the inheritance is over $5M there will be no US tax on it. There will be US tax due on any interest earned on the money while in probate. There will be reporting requirements if the inheritance is over $100k on form 3520, and arguably FBAR and 8938 depending on the size of the inheritance.
#8
Re: Avoiding tax on a money wire
Unless the inheritance is over $5M there will be no US tax on it. There will be US tax due on any interest earned on the money while in probate. There will be reporting requirements if the inheritance is over $100k on form 3520, and arguably FBAR and 8938 depending on the size of the inheritance.
#9
Re: Avoiding tax on a money wire
The OP's bottomline is they will have no federal US or UK tax to pay on the principal amount of any inheritance. However, there are a few US states that charge the beneficiary an inheritance tax, so check with state tax laws too.
#10
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Joined: Jan 2013
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Re: Avoiding tax on a money wire
big thanks to all. Just wanted to clarify. It would blow to pay 20/30 % tax on a large amount.
#12
Re: Avoiding tax on a money wire
There's no tax due so no penalty because of tax payable........the only possible fines would be those associated with not filing FBAR and 8938
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Last edited by nun; Jan 3rd 2013 at 11:38 pm.
#14
Re: Avoiding tax on a money wire
The OP as beneficiary will have no UK or US federal tax to pay no matter how large the inheritance, the taxation falls on the estate if it is above the relevant thresholds. Depending on where the OP lives they might have to pay state inheritance tax, but that's not common. The OP should make sure they comply with all the US federal reporting requirements though and watch out for tax on any interest acrude while in probate.