Bank Statement for a Foreign Inheritance
US persons who receive an inheritance from a foreign estate generally don't owe tax on it, but the IRS still requires reporting via Form 3520 if the amount exceeds the threshold. Bank statements document the transfer from the foreign estate or account into your US account, which is the core evidence for that filing. Here is how to prepare.
Key Benefits
- Documents the international wire transfer of your inheritance
- Supports the Form 3520 reporting threshold calculation
- Provides evidence distinguishing a tax-free inheritance from taxable income
- Helps establish the cost basis for any inherited foreign assets later sold
How It Works
- Step 1: Request documentation from the foreign estate or executor showing the distribution amount
- Step 2: Download the statement showing the inbound wire transfer into your US account
- Step 3: Convert it to Excel with Bank Statement Converter to document the exact date and amount
- Step 4: Provide both documents to your CPA for Form 3520 reporting
Frequently Asked Questions
- Do I owe US tax on a foreign inheritance?
- Generally no — inheritances are not taxed as income by the IRS, regardless of whether they come from a US or foreign estate. However, reporting requirements still apply.
- What is Form 3520 and when is it required?
- Form 3520 reports gifts and inheritances from foreign persons or estates exceeding $100,000 in a year. It's an informational filing, not a tax payment — but penalties for not filing can be steep.
- Does receiving a foreign inheritance affect my FBAR filing?
- If the inheritance results in a foreign account balance over $10,000 at any point, you may also need to file an FBAR — check whether the funds stayed abroad or moved to a US account.
- What if the foreign estate sends the inheritance in installments?
- Each transfer should be documented separately with bank statements, and the aggregate amount for the year determines whether you cross the Form 3520 reporting threshold.
Convert Your Inheritance Transfer Statements