I recently inhereted money from my parents in Germany. I am a US
resident (have agreen card), married to a US citizen. I would like to
arrange a wire transfer ($100,000) into our checking account. What are
the tax implications in this scenario. We already are in the process
of filing inheretence taxes in Germany. Will I be taxed again?

Thanks!

Hello and thank you for your question.

Gifts and inheritances are US tax-free to the recipient.  That's true
whether they are gifts/inheritances paid from US sources or foreign
sources.
Internal Revenue Code Section 102(a)
"Gross income does not include the value of property acquired by gift,
bequest, devise or inheritance."
http://www.timbertax.org/research/irc/strSearch2.asp?file=SubChB&sec=Sec.%20266&id=research&topic=taxcode

There is a requirement of an information return when
gifts/inheritances of more than $100,000 are received from a foreign
source. The reporting to the IRS is on Part IV of IRS Form 3520
http://www.irs.gov/pub/irs-pdf/f3520.pdf

Since the testis "more than $100,000," this wire alone will not
trigger the reporting but if you receive any further amount during the
year you will need to file Form 3520 when the aggregate exceeds
$100,000.

U.S. banks have reporting obligations of their own,
http://www.occ.treas.gov/moneylaundering2002.pdf
so they may ask you for identification and other information on
receipt of the wire.  But there are no tax issues nor any reason not
to transmit the funds by wire.

Search terms used:
money-laudering report wire

Thanks again for letting us help.  If any of the above is unclear,
please feel free to request clarification.  I would appreciate it if
you would hold off on rating my answer until I have a chance to reply.

Richard-ga

---

Clarification of Answer by richard-ga on 08 Jul 2005 08:17 PDT

Sorry, the search terms are
money-laundering report wire

I actually searched with "money-laudering" and was successful in
finding the banking reference, because the .html headnote had a
matching typo.

-R

Thanks for a timely, precise and complete answer to my question.