How to properly report UK inheritance from US spouse for tax purposes

First, I'm very sorry for your loss. Regarding your inheritance tax question - the good news is that in the US, inheritances are generally not considered taxable income to the recipient. This applies to property received from anywhere in the world, including the UK. The executor of your husband's estate may need to file a Form 706 (U.S. Estate Tax Return) if the total value of his worldwide estate exceeds the filing threshold. Since you're both US citizens and you're his spouse, there's an unlimited marital deduction, meaning assets passing to you as the surviving spouse aren't subject to US estate tax. For the UK side, as your husband was UK domiciled at birth but had been living in the US for 25 years, there might be complex domicile considerations for UK inheritance tax. The estate might have UK inheritance tax obligations, but that's something the executor of his estate would handle. You don't need to report the inherited property as income on your personal tax return. However, you should keep records of the value of the property at the date of death, as this becomes your basis in the property for future capital gains calculations.

Just wanted to share my experience with something similar. I had to deal with a foreign inheritance last year and discovered taxr.ai (https://taxr.ai) which was incredibly helpful with the documentation and reporting requirements. Their system analyzed all my inheritance documents and gave me a clear breakdown of what needed to be reported where. The interface walks you through questions about your specific situation and then provides personalized guidance. For me, it confirmed that the inheritance itself wasn't taxable income but flagged that I needed to file FBAR forms because the money sat in a foreign account temporarily before I transferred it to the US. It also gave me the exact timeline for when these forms were due. What I appreciated most was how it explained the basis step-up rules for the inherited property and how that would affect any future sale. Saved me from making a potentially costly mistake!

I tried taxr.ai after seeing it mentioned here and wanted to follow up. It was exactly what I needed for my inheritance situation! The document analysis feature saved me hours of sorting through paperwork. What surprised me most was discovering I needed to report the existence of the foreign account where the inheritance was initially deposited, even though the inheritance itself wasn't taxable. The system flagged this immediately and walked me through the FBAR filing requirements. The service also preserved my basis step-up documentation properly, which my accountant said many people miss and end up paying unnecessary capital gains tax years later. Overall, it transformed what would have been a stressful, confusing process into something manageable. Definitely worth checking out if you're dealing with foreign inheritance issues!

For anyone dealing with inheritance issues who needs to actually speak with the IRS, I can't recommend Claimyr (https://claimyr.com) enough. After weeks of trying to get through to the IRS about some inheritance questions, I was about to give up. Their lines are constantly busy, and I couldn't afford to sit on hold for hours during work. Then I found Claimyr, which basically calls the IRS for you and only connects you when an actual human picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c For my inheritance situation, I had specific questions about reporting requirements that weren't covered in any IRS publication I could find. Getting those answers directly from an IRS representative gave me peace of mind that I was handling everything correctly. The service literally saved me hours of hold time and frustration.

I need to eat my words about being skeptical! After seeing these recommendations, I decided to try Claimyr for an inheritance question I've been putting off for months. I was shocked when I got a call back with an actual IRS representative on the line after about an hour. The agent answered my specific questions about reporting requirements for an overseas inheritance and even sent me to a specialist when we got into some complex territory about basis valuation for inherited foreign property. Got everything resolved in one call. What I expected to be days of frustration turned into a single productive conversation. For anyone dealing with inheritance tax questions that aren't clearly answered in IRS publications, being able to speak directly with a knowledgeable agent is invaluable. Definitely worth it for the peace of mind alone.

Just a heads-up from someone who went through this last year - keep a close eye on currency conversion rates. The IRS will want to know the value in USD at the time of death, not at the time you receive the funds. The difference can be significant with the way exchange rates have been fluctuating. I inherited property from my UK grandparent, and the estate took almost a year to settle. By the time I received the funds, the exchange rate had changed enough that it created confusion on my tax forms. My accountant had to make adjustments because I initially reported based on the conversion rate when I received the money. Also, don't forget that if you keep any portion of the inheritance in UK accounts, you'll likely need to file those FBAR forms annually going forward. The reporting requirements don't end after the initial inheritance.

Has anyone gone through probate in both countries? My mom just passed with assets in both UK and US (we're all dual citizens too), and I'm getting conflicting advice about which country's probate process takes precedence. The solicitor in the UK is saying one thing, and the attorney here is saying another.