Re: What exactly is a "foreign trust" under IRC 679? Form 3520? A

"raylopez99" <raylopez99@xxxxxxxxx> wrote in message news:1185443472.896326.255210@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Interesting. I wonder if you can disclaim an inhereitance--if your
rich overseas aunt wants to give you real property that will result in
you potentially having to pay US estate tax (since US estate tax is
worldwide), and you don't have the cash to pay the US estate tax, then
disclaim it--but is there an IRS form for that? Or should you just
orally disclaim it?

Under current law, the heir to an estate does not pay the inhertance tax., the estate does. And since you posit a rich aunt who is not a US citizen or resident as the decendent, that estate has no oblgtion under US Estate tax law unless some or all the property in the estate is in the US.

As a practical matter it's impossible at present
for the IRS to find out what you own or might own overseas, unless you
tell them, but with computerization of databases and "tax
harmonization" maybe in a generation or two it might be different. As
pointed out in the GAO report, only five jurisdictions presently share
data ("Canada, France, Denmark, Sweden, and the Netherlands.") I'm
sure the IRS wishes it was everybody, and are working in that
direction.

But the law does oblige you to report any income you realize from your foreign holdings and any bank accounts you may have there. If you don't, you have committed a crime.

.

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