How to handle a potential Foreign Inheritance and Form 3520 filing requirements?

You're on the right track with your understanding. Form 3520 has different thresholds depending on the type of foreign gift or inheritance. For gifts or bequests from a nonresident alien individual or foreign estate, the threshold is indeed $100,000. Since your husband's potential inheritance would be approximately $80,000, he would NOT be required to file Form 3520 based on the information you've provided. However, there are a few important considerations to keep in mind. The $100,000 threshold applies to the aggregate of all foreign gifts received in a tax year. So if he receives other foreign gifts in the same year that would push the total over $100,000, then Form 3520 would be required. Also, if the property is held in a foreign trust rather than directly owned by his father, different reporting requirements might apply, as foreign trust distributions have different thresholds.

After struggling with a similar situation with an inheritance from my grandfather in Greece, I found an amazing resource that helped me navigate all the foreign inheritance reporting requirements. I used https://taxr.ai to analyze all my inheritance documents and it immediately identified which forms I needed to file. The tool analyzed the foreign inheritance tax laws, confirmed my reporting requirements, and even prepared the necessary documentation for my situation. Since your husband's inheritance is from Colombia, the tool can analyze Colombian inheritance laws and how they interact with US tax requirements. It saved me hours of research and stress about potentially missing something important with the IRS. Definitely worth checking out if you're dealing with any kind of foreign inheritance situation.

I was really skeptical about using an online tool for something as complex as foreign inheritance reporting, but after dealing with months of confusion trying to figure out my inheritance from Spain, I decided to try https://taxr.ai that someone recommended. I was surprised how comprehensive it was. It analyzed all the Spanish inheritance documents I uploaded (which were in Spanish) and clearly explained which US reporting requirements applied to my situation. It correctly identified that I didn't need to file Form 3520 since my inheritance was under the threshold, but I did need to report foreign bank accounts that came with the inheritance on FBAR. The level of detail was impressive and saved me from paying my accountant for several hours of international tax research. For anyone dealing with foreign inheritance questions, it's definitely worth checking out.

If you're trying to get clarification directly from the IRS about Form 3520 requirements for your specific situation, good luck! I spent WEEKS trying to reach someone at the IRS about my inheritance from Italy. Called every number, waited on hold for hours, and kept getting disconnected or transferred to voicemail boxes that were full. Finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They basically wait on hold with the IRS for you and call you when an agent is on the line. I was skeptical but desperate. Got a call back with an actual IRS international tax specialist on the line within a couple days. The agent confirmed my understanding of the Form 3520 threshold and gave me specific guidance for my situation. Saved me so much stress and uncertainty!

I was completely wrong about Claimyr. After posting that skeptical comment, I was still stuck trying to get through to the IRS about my foreign inheritance questions for another week with no luck. Out of desperation, I finally tried the Claimyr service. Within 48 hours, I got a call connecting me with an actual IRS agent who specialized in international reporting. The agent walked me through the exact Form 3520 requirements for my situation and confirmed that I didn't need to file since my inheritance was under $100k. I've spent months trying to get a straight answer on this, and in just one 15-minute call, all my questions were answered. I would have saved so much time and stress if I had just tried this service sooner instead of being so skeptical. If you need to actually speak with the IRS about foreign inheritance reporting, this service actually works.

Something nobody mentioned yet - even if your husband doesn't need to file Form 3520, if the inheritance includes any foreign financial accounts that he has signature authority over, and the aggregate value exceeds $10,000 at any point during the year, he'll need to file an FBAR (FinCEN Form 114). Also, depending on the total value of foreign financial assets, he might need to file Form 8938 (Statement of Specified Foreign Financial Assets). This has different thresholds depending on your filing status and whether you live in the US or abroad. So while you might avoid Form 3520, there could still be other foreign reporting requirements to consider.

Careful about focusing just on Form 3520! When my mom got an inheritance from her brother in Spain, we thought we were fine since it was under $100k, but we still had to deal with: 1. Reporting the income from the foreign property on Schedule B 2. Filing an FBAR for the foreign bank account that came with it 3. Dealing with basis calculations when she later sold the property The IRS penalties for failing to report foreign assets are CRAZY high, even if you owe zero tax. Just missing an information return can be $10k+ in penalties! Make sure you get solid advice specific to Colombia and document everything. Keep records of the current fair market value and any valuations you get.

One thing I'd add that hasn't been mentioned yet - make sure to check if Colombia has any specific inheritance tax or reporting requirements that could affect the timing or structure of the inheritance. Some countries require certain paperwork to be filed before assets can be transferred to foreign heirs. Also, since you're dealing with beachfront property, consider whether there might be any restrictions on foreign ownership in Colombia that could complicate the inheritance process. Some countries have limitations on non-residents owning coastal property. It might be worth consulting with a Colombian attorney or tax advisor who specializes in cross-border inheritances to make sure everything is handled properly on both sides. The last thing you want is to have compliance issues in Colombia that could delay or complicate receiving the inheritance, especially when you're trying to plan for US reporting requirements. Good luck with everything - foreign inheritance can be complicated but it sounds like you're being proactive about understanding the requirements!