Offshore Tax Compliance Archives

Foreign Inheritance Rules for U.S. Tax Residents

Although U.S. tax residents generally do not owe income tax when they receive an inheritance from abroad, reporting rules may still apply.

In the area of foreign trusts and foreign gifts, the greatest risk to U.S. taxpayers is information reporting, not tax.

When someone becomes a U.S. tax resident, all worldwide income must be reported to the IRS, including gains from the sale of foreign property.

Anyone owning bank or investment accounts outside the U.S. are obligated to report all foreign financial assets and any income they produce.

Foreign owners of U.S. businesses with U.S.-based workers enter a tax framework that combines income tax rules with employment tax compliance.

Once you become a U.S. tax resident, all your foreign assets—regardless of where they are located—must be disclosed to the IRS.

The U.S. international tax system is complex, with substantive income-inclusion rules, extensive reporting obligations, and strict penalties.

Many taxpayers incorrectly assume that immigration status and tax residency are the same—but the IRS does not see it that way.

The U.S. tax residency rules are designed to determine which individuals are subject to the country’s global tax system.

The primary purpose of FIRPTA is to guarantee the IRS’s ability to collect tax from non-resident sellers of U.S. real property interests.