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Old 01-19-2017, 01:51 AM
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Inheritance tax from abroad

My grandfather was born in Costa Rica however he was a US citizen living in the US for the majority of his adult life. He recently passed away and left my mother, who is also a US citizen, an inheritance in the form of a CD. The CD is in Costa Rica, my mother is the sole beneficiary and the CD is for over $150,000.

My grandfather sold property in Costa Rica about 7 years ago and immediately put that money in a CD and it has not been touched in those 7 years.

My mother would like to transfer that money to her US bank account, however we have questions about if the money is taxable. We have asked a few tax "professionals" and we have been given different answers, so hopefully someone here can help. Please let me know what the easiest and most legally cost effective way to do it. Thank you



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Old 01-19-2017, 04:09 PM
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There are generally no taxes on transferring money into the U.S. (there is a withholding tax on trasnferring money out).

There are two primary taxes in the U.S. that you are probably asking about, an income tax and an estate/gift tax.

With respect to the estate/gift tax, those are taxes on transferring property. They look to the value of the amount transferred. If it was transferred during life, the gift tax can apply, if on death, the estate tax can apply.

There is an amount of property that is exempt from the estate tax. It is several million dollars. So the first thing you have to figure out is what was the total value of all assets of your grandfather's estate and was it large enough to incur an estate tax.

With respect to the income tax, it will be imposed on the income from the CD. This may be reported on your grandfather's income tax return or your mother's income tax return, depending on the year.



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