On Mar 29, 2:51*pm, "Stuart Lerner" <l...[at]verizon.net> wrote:

- quote -

I don't deal with estates that much, but I believe the answers are:
yes and yes.

- quote -

Because the assets would have had a step up in basis on the date of
death, it is likely that little gain would have been recognized on the
liquidation of the assets to pay the estate's debts. You may need to
make some assumptions. Taking a step back, the amount of income you
should recognize is the difference between the net worth of the estate
on the date of death (after estate taxes, if any), and the cash you
receive.

- quote -

Only a little.

- quote -

No.

You should also be aware of Form 3520, Part IV on which you should
report the inheritance. The penalty for failing to report it can be
steep. There is also the possibility that you may need to file Form
TD F 90-22.1. Again the penalties for failing to file this form can
be large. I generally try to file this form when in doubt.

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I am a Us citizen, about to receive an inheritance from
Switzerland, and need some guidance in handling the
applicable US taxation. It took over a year from the date
of death till the availability and release to me of the
estate's funds.

In that interim, the holdings were in stocks, in the Swiss
stock exchange, legally confined within the estate, and
managed by a Swiss financial planner. I don't yet know
all the financial details of that period, but know that
estate expenses, including debts, Swiss taxes and fees
have all been paid by now.

Now that the inheritance is available to me, the Swiss
financial manager of the account gave me the choice
of my receiving the stocks, or having them sold and
sending me cash payment, converted into US dollars. I
chose the latter, and that leads me to my questions.

Is the tax calculation here having to account for the
change in value from date of death to date of sale of
the stocks? Does it also have to account for the change
in currency exchange rates (CHF to USD)between those
dates?

Do I have to extract the history of stock transactions for
that interim period, as well as all the details of
dividends, fees and taxes, both for the stocks
themselves and the estate related and death related fees
and taxes? For example, debts left over from the estate
would have been paid in that time period by sale of
stock. This would have generated capital gain or loss.
Is it my responsibility to resurrect all of those Swiss
operations and report them as having US tax
implications?

Am I making this more complicated than it has to be?
Is it possible that, since the inheritance is made
available to me now for the first time, and up to now
has been managed totally within the Swiss system,
that the clock for basis resets to the present time?
And that the history of operations before the date of
availability to me would not have tax relevance
outside of Switzerland?

Thank you for any guidance here,

Stuart

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >