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Old 08.06.2015, 19:54
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Inheritance Tax for USA resident

I am a USA citizen and am about to receive an inheritance from a Swiss resident who passed away.

I have been sent income tax forms which are in French and I am clueless about what to do.

The executor of the Estate has done all the with holding so why would I be getting forms and correspondence ?
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Old 09.06.2015, 21:49
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Re: Inheritance Tax for USA resident

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I am a USA citizen and am about to receive an inheritance from a Swiss resident who passed away.

I have been sent income tax forms which are in French and I am clueless about what to do.

The executor of the Estate has done all the with holding so why would I be getting forms and correspondence ?
It isn't obvious why you would receive income tax forms. There is inheritance tax in France, Germany and Switzerland. In Switzerland it is (assuming next Sunday's voting goes the right way) solely a matter of the cantons. Here's the Vaud page: http://www.vd.ch/themes/etat-droit-f...s/successions/

You may want to retain a tax preparer (mandataire) to handle this for you.

BUT: be sure to file with the IRS forms 3520 (and if appropriate 3520A). There is NO US tax on inheritance from abroad but if you don't file a declaration then the penalties could be draconian. You will also need to check the box at the foot of Form 1040 Sched B and perhaps file FinCen114 (ex-FBAR) and 8938 for 2015.

The difference between inheritance tax and an estate or succession tax (the UK's IHT is not really an inheritance tax at all but an estate tax) is that IHT (as in European countries and some US states) varies the tax rate according to the relationship between the decedent and the legatee.
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Old 11.06.2015, 05:33
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Re: Inheritance Tax for USA resident

Thanks for the advice for filing with the IRS and identifying the forms. The Estate is in Geneva so I have to pay tax to the Canton but I am wondering if this would be subject to a Tax credit in the USA for taxes that are paid overseas. Any ideas ? Thanks
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Old 15.06.2015, 21:10
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Re: Inheritance Tax for USA resident

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Thanks for the advice for filing with the IRS and identifying the forms. The Estate is in Geneva so I have to pay tax to the Canton but I am wondering if this would be subject to a Tax credit in the USA for taxes that are paid overseas. Any ideas ? Thanks
There probably won't be any tax credit because there is no US tax unless the CH tax resident is also a US citizen or resident AND left an estate over $5,340,000 (2014) or $5,430,000 (2015) or was a nonresident alien and had certain US property. There could be estate or inheritance tax levied by a US state if there is property there, or the decedent was domiciled there. No credit for that, usually, but I could conceive of some state of facts that would create a credit against the Swiss levy.

I assume the notaire handling the succession will deal with the Geneva tax authorities.

When there is foreign estate or inheritance tax paid, usually there is a credit for US federal estate tax. On rare occasions there is double taxation usually because the nature of the transfer or the timing of the transfer is incompatible. that normally means trusts, something that scarcely exists in Switzerland and when it does normally involves foreigners.
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