What to tell Uncle Sam!!
 

So I am somewhat confused, after reading some other posts on BE and would really like some straight forward on the chin answers, with no frilly bits around the edges please :)

I am moving back to the US. ( did I ever really leave only been back in the UK since June 2012)

1. Do I have to tell the IRS about my inheritance in the UK ie the house and any cash amounts before I file my 2012 taxes, or after, or not at all!!

2. Will my assets affect my taxes in the US when I file in the US in 2013 for my 2012 year!

3. Can the IRS make any claim in my bank and offshore accounts in England and the Channel Islands if god forbid I had someone try and sue me or wanted to file bankruptcy in the US (hypothetical but interested as a future precaution!!

Thank you :)

Re: What to tell Uncle Sam!!
 

First of all, I didn't know you were gone and never thought you would leave California. Welcome back.

1. Report the inheritance on your next years forms (2012 taxes). There shouldn't be any tax due if it was less than $5.12 million.

2. No tax on assets but only on income.

3. You have to declare all assets during bankruptcy. Certain assets are protected such as homestead on a primary residence (Florida pretty much protects the home no matter the value and equity). Make sure you declare overseas assets since the penalities can be very high if not reported. The IRS can probably get to assets anywhere in the world if they try hard enough. I supposed that someone could sue you and try to get those assets but would need to follow the rules of that country about garnishment.

Re: What to tell Uncle Sam!!
 

Thank you Michael, moved back to care for my mother in June, she has since passed away. :(

Re: What to tell Uncle Sam!!
 

Look up IRS Form 3520 & Instructions. You simply have to report the inheritance on that form. If I remember correctly, you send it in to a different address, it does not go in with your taxes.

Then, if you have foreign accounts etc. over certain threshold amounts in 2012, there is a form to submit to the US Treasury (Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts) and a tax form (IRS Form 8938.). A bit bureaucratic, but relatively simple.

Re: What to tell Uncle Sam!!
 

We need to talk....:confused:

Re: What to tell Uncle Sam!!
 

1)report IRS about all assets that you have
2)report IRS about your foreign income, i.e. if you let it and have income from renting.

Please note if you're still paying your mortgage, IRS do not consider the property to be yours, i.e. it's not in the asset list and you need not report about it.

If the property is mortgaged and you don't have any income from it you need not make a report about it. That's what I was told in HR block.

Re: What to tell Uncle Sam!!
 

Very sorry to hear that Poppy.



How come you are you moving back? Did you keep your place and stuff here while you were gone?

Re: What to tell Uncle Sam!!
 

very sorry to hear that.

Re: What to tell Uncle Sam!!
 

We do :blink: :lol:

Re: What to tell Uncle Sam!!
 

No mortgages :)

Re: What to tell Uncle Sam!!
 

Lost my place but have my job and all my stuff is in storage :) moved and flew the cat back to England in a whirl wind 12 day turn around trip.

Re: What to tell Uncle Sam!!
 

Any foreign taxes paid from overseas investments can be used as tax credits to offset US taxes owed. If the investment is in high tax European countries, there probably won't be any additional US taxes owed. If the investment is in tax haven countries, your US tax liability will likely be higher.

Re: What to tell Uncle Sam!!
 

Righto gottcha Thanks ;).....I know where you are for coffee if I get in a fix :)

Re: What to tell Uncle Sam!!
 

Cannot speak to IRS or bankruptcy, but depending on the state laws you maybe able to protect of some of your assets from by putting them in a living trust. Here in AZ you can protect 50% of assets and also keep them out of probate when you die.

It may sound morbid, but I am thinking about all this stuff since my father passed in May and even though he had a will we are still processing his estate through probate back in Scotland. Will be seeing a family lawyer and financial specliast here to make sure I have everything in order in case something happens to me or my wife so that our little is taken care of to the best of our ability.

Re: What to tell Uncle Sam!!
 

Probate :eek: that's a nightmare in it's self.

Yes I will look into this as well :) living trust.