Ah, but therein lies the problem. My brother died Christmas of 2001, just after he closed on his new house (he never actually got to live in it!). He left everything to my Mum, with the understanding that half would go to me. We are now in an emotional position to be able to sell the house - but it has never been in my name - hence it really is an inheritance, or gift. So I assume I am therefore liable for tax on my £50,000! If yes, it will take a huge chunk out of what I was hoping to use as a down payment on something in SF - and I'll have to pay property taxes on anything I buy, so it does seem like I'm going to get screwed! I am just trying to find a way around that!

Well his estate wil;l be below the threshold for UK inheritance taxation.

If your Mother has not been living in the house then it could attract Captal Gains Tax when she sells it. The difference between the value when she inherited it and now.

Beneficiaries can agree to amend the will, so that you recive your share direct from the estate. Without being too goulish a gift from your mother could attract IHT if she does not live 7 years. If her estate was big enough.

Receiving a gift or inheritance in the US, is this taxable?, I would be surprised if it was but do not know.

I think that you are confusing capital gains tax with inheritance tax.

If you inherited something you acquire it at current market value, under UK law at least, but the bequest may be chargeable to inheritance tax (if the estae is large enough. My guess would be that you would also receive it at current market value under US law - but you really DO need the advice of a US tax accountant who is experienced in such matters. :lecture:

OK - so I think I've been making this more difficult than it needs to be (and found someone who wanted me to pay $700 for his advice - so decided to do more research on my own).

Forget the house. Basically my mother is sending me a gift of £50,000. According to the IRS website it is the donor, not the donee who pays tax on that gift. So then in theory, I should not be liable. And the IRS would not tax my Mum! And £50,000 is less than the UK threshold for gift giving, so she shouldn't be liable.

As this is not earned income but a gift, I should only have to declare it for customs purposes (but the bank would do that in the case of a wire transfer), and not for income tax purposes as it is not earned wages.

Does this sound right to anyone?

I am not qualified to comment on the US treatment (though what you said sounds likely), but the gift by your mother will not be a totally tax free gift* but a "potentially exempt transfer", which means that if your mother survives seven years from the date of the gift there will be no inheritance tax (IHT) to pay, but if she dies before the seven years are up there is some IHT to pay, calculated on a reducing scale over the seven years - reducing 10% a year, if I remember correctly, so 30% of the tax would be payable if your mother died in the seventh year.

* Unless that nice Mr Brown has changed it, the threshold for totally tax free gifts is only £2,000 a year to any one person, or £5,000 for marriage gifts.

That's what I had found out too - and my Mum said she won't worry about it if she dies in 7 years - it will be my problem to sort out then! As she's only 60 and determined to outlive us all, I think we may be safe!

I just paid a big cheque into our account- and made the mistake of depositing it by ATM. The bank have put it on Federal hold until the funds are traced to make sure its clean money. After phoning to enquire about it- we were told that they can hold it for 20 days but as the bank knows us well (been with them 12 years), they'll only hold it a week in our case. The nice lady on the phone said I should have walked the cheque into the bank - paying it in via ATM kicked off the Federal alert system automatically and the bank has little control over the process then. The funds would have been released a lot quicker had I handed the cheque to a bank clerk. Just thought I'd pass that on.

I just want to clear a couple of banking things up -

A CTR is a Currency Transaction Report - ONLY filed to the IRS in the case of cold, hard cash IN EXCESS of US$10,OOO being deposited, withdrawn etc.
Eg - you deposit $5000 into savings, $5000 into checking = NO CTR. If you deposit a further $1000 into a money market account then the total is over $10,000 and a CTR WILL be filed. The CTR is completed on a business day basis (ie $10,000 cash per business day allowed)
The CTR is not filed for paper/wire transactions, as these are all trace-able (unlike cash transactions)

As for the above $3000, this alludes to the MIL - Monetary Instrument Log. Say you purchase $7000 worth of traveller's cheques with cash, yes, the bank will copmplete a monetary Instrument log - the teller will hate to do this as they will have to write down every single serial number of each travellers cheque purchased. An easy way around this si to DEPOSIT the %7000 into your bank account, then write a cheque or a withdrawal slip for the amount. (as long as there is a 'paper trail' that can be traced, no MIL is required) For cash amounts OVER $10,000, (deposit, withdrawal etc) of course, the CTR WILL be filed to the IRS.

An SAR is a Suspicious Activity Report - this is not down to a lowly bank teller - it has to be approved to be filed to the proper authority by management. It could be that you seem to be money laundering or that your safe deposit box smells like marijuana but there does need to be a definite reason to file the SAR. Eg - Say you do deposit $10,000 per business day for a week to get around the CTR filing, then an alert teller may suggest an SAR to her manager.

Hope this helps.
-Trace:zzz:

Another banking/ATM thing . . .

It makes no difference on the Federal side of things whether you deposit a check at the ATM or at the teller window. Big Brother is not watching you at ATM's !!!!

The only reason the hold on funds may have been shorter for you if you had seen a teller in person, is that they would have recognized you (you said you'd banked there for 12 years) and cut you some slack.

The bank staff get the deposits out of the ATM machines the next business day, process them as usual, but under dual control, as the customer is not there. If the deposited check was a large amount and you didn't have compensating funds in a savings account, then, yes, there would be a hold placed - probably for 5 business days to give the check time to clear through the bank it was drawn on.

Tracy.

And if you deposit a cheque for $23,000 via ATM, you set off the Federal process automatically, like I just did, not so when you walk in the bank to deposit with a bank teller. Unless Wachovia bank has given us false information..

"paying it in via ATM kicked off the Federal alert system automatically " ???

I worked for Wachovia Bank in Virginia for 3 years- (also Barclays Bank in the UK for 10 years)

You do not 'kick off the Federal Alert System' just by using an ATM for your deposit ! Whoever told you that is BS-ing you.

You can deduce that by the fact that "the nice lady at the bank" said they could hold it for 20 days but she only held it for a week. If it was up to the Feds, she wouldn't have any choice !

If you deposit the check into a checking account, if it's a local routing number, they can hold it for 2 business days, if it's an out-of state routing number, the hold can be for 5 business days. If deposited into a savings, the hold can be for longer, but this is rare. It's up to the teller/teller supervisor how long to hold it for (if at all) not the Feds !!

Tracy.

Thanks for the info! The "nice lady" from the bank we spoke to was in Virginia- our bank referrred us to her. I've got her phone number and will be on it Monday! It WAS an in-state routing number on the cheque (mind you- when I deposited it - into our checking account- a notice did come up on the screen about Federal holding- so maybe things have changed since you worked there?). As things stand, the money won't be released from the cheque till Thursday- she is trying to get it released quicker (by Tuesday- which would still be a hold of 4 business days). And this is only because we are long standing customers of the bank.

Hi !

That's good. Yes, if she made a copy of the check before it was sent for clearing, she can phone the bank it's drawn on to see if/when it clears and then she can easily release the hold on your account, knowing for sure that it will not bounce for lack of funds/stopped payment /missing signature etc etc, as it has already been debited from the drawer's account.

Even if the check was written from a locally known bank, it doesn't necessarily have a local routing number. Eg . It could be drawn on the Wells Fargo Bank down the road, but it clears through their main branch out of state,m therefore having an in-state bank address, but an out of state routing number. (which takes longer to clear, as it has farther to 'travel')

The regulations to hold funds in an account, pending it's clearing, are Federal regs, but it's up to the individual bank to disclose their 'hold' policies to their customers. (you should have been given these regs when you opened your account.)

Sounds like she was trying to make you think she personally went up against the Feds on your behalf to get your check cleared !!!! That's why I left banking - too boring and too many rules and regs, and too many chiefs !!!!

Hope your deposited check clears ok !!!
-Tracy.

Thanks for the info - I've told my Mum to wire it to my account as this seems to be the safest and most efficient way! I've also asked her to ask for the wholesale exchange rate as many of you suggested - so now it's off to the mortgage broker!!!

It did- the cheque had cleared the first time we phoned her. Because we knew the bank regulations we fully expected the funds to be available within two days. However, because the check was over $5000 and I paid it in by ATM, it started "an electronic process which could have been avoided if I'd walked it into the bank" - her words. The nice lady in Virginia promised to epedite the process..which she did..and the funds were made available 9am Tuesday Morning. The same day we got written notification from the bank in the mail that because my ATM deposit exceeded $5000 there was a hold on the funds and they wouldn't be availble until the 15th (that would have been 12 business days!). Obviously, she managed to speed up the process quite a bit, whatever the process is, but it wasn't held for simple cheque clearing.

I've read up about the new ammendments to the BSA, and knew the money would be reported to the IRS etc because the deposit exceeded $10,000 (didn't have a problem with that)- what I didn't expect was that it would be on hold for more than 2 days.

Since I've done all our banking online and via ATM for the last 8 years or so, no-one in the bank would recognise me- there must be forms to fill in or something for a deposit of that size now. I've deposited big cheques in by ATM in the past without all this palaver.

After I read your post, I thought I must have been seeing things with the notice that came up on the ATM screen- but the written notification from the bank confirmed what I saw. Big Bruv doesn't have to watch over ATMs - they can pull anyone's account at any time without giving a reason or even notifying the account holder... under the patriot act. I guess its kinda difficult to give a legitimate reason for the money to a machine.

Moral of this story- if you want to deposit an amount exceeding $5000 in the bank- walk it inside, do not use the ATM.