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Cross-Border Inheritance Checklist

Key U.S. tax steps when assets, decedents, and heirs are not all in the same country

Cross-border inheritance matters sit at the intersection of U.S. estate tax, income tax, and international information reporting. The U.S. tax issues differ depending on whether you are a U.S. person receiving a foreign inheritance or a family administering the estate of a non-resident alien with U.S.-situs assets. This checklist addresses both.

Who should use this?

This checklist is for U.S. persons who have received or expect to receive a foreign inheritance or gift, and for families dealing with the estate of a non-resident alien who held U.S.-situs assets. Use Part A if you are a U.S. beneficiary of a foreign estate; use Part B if you are administering the U.S. estate of a non-resident alien decedent.

Part A — U.S. Person Receiving a Foreign Inheritance or Gift

For U.S. citizens and residents who have inherited from, or received a gift from, a non-U.S. person or foreign estate

Section 1

Form 3520 Reporting

The FBAR is filed with FinCEN — not the IRS — and is due April 15 with an automatic extension to October 15. It is separate from your tax return and is not filed with it.

Determine whether you received a gift or inheritance from a foreign person, foreign estate, or foreign trust during the year.
Confirm whether the aggregate amount received from a nonresident alien individual or foreign estate exceeds $100,000 (adjusted annually — confirm current threshold with counsel).

If the threshold is met, Form 3520 must be filed — even if no U.S. income tax is due on the receipt. Penalties for failure to file begin at 5% of the amount received per month, up to 25%.

If the receipt came through a foreign trust distribution rather than directly from an estate, analyze whether the distribution is from a foreign grantor trust or a foreign non-grantor trust — the income tax treatment differs fundamentally.
File Form 3520 by the due date of your U.S. income tax return, including extensions.

Section 2

Income Tax Analysis

Inheritances received directly from a foreign estate are generally not subject to U.S. income tax. Distributions from foreign trusts may be.

Confirm whether the receipt is a direct inheritance (generally not taxable) or a distribution from a foreign trust (potentially taxable under the throwback rules).
If the distribution is from a foreign non-grantor trust, analyze DNI, UNI, and the throwback tax and interest charge before accepting or planning the distribution.
If you inherited foreign property (real estate, securities, business interests), determine your U.S. tax basis — generally fair market value at date of death for inherited property.
If you inherited U.S. real property from a non-resident alien, analyze FIRPTA implications before any subsequent sale.

Part B — Administering the U.S. Estate of a Non-Resident Alien

For families and advisors dealing with a non-resident alien decedent who held U.S.-situs assets at death

Section 3

U.S. Estate Tax Obligations

Non-resident aliens are subject to U.S. estate tax on U.S.-situs assets at rates up to 40%, with only a $60,000 exemption — or a larger exemption under an applicable treaty.

Identify all U.S.-situs assets held by the decedent at death — including U.S. real property, U.S. brokerage accounts, U.S. corporate stock, and interests in U.S. entities.

U.S. real property is always U.S.-situs. U.S. corporate stock is U.S.-situs regardless of where the certificates are held. Bank deposits at U.S. banks may or may not be U.S.-situs depending on the type of account.

Determine whether the decedent’s country of domicile has a U.S. estate tax treaty — and if so, what exemptions, deductions, or credits the treaty provides.
Determine whether Form 706-NA (U.S. Estate Tax Return for Nonresident Not a Citizen) is required — required if gross U.S.-situs assets exceed $60,000 (or the applicable treaty threshold).

Form 706-NA is due nine months after the date of death, with a six-month extension available. Late filing penalties and interest apply.

Calculate U.S. estate tax liability — and determine how it will be funded, given that U.S. financial accounts will be frozen pending the IRS transfer certificate.

Section 4

IRS Transfer Certificate

U.S. financial institutions freeze the accounts of deceased non-resident aliens until an IRS transfer certificate is received. This process must be initiated promptly.

Step	Action	What to know
Notify	Notify all U.S. financial institutions of the decedent’s death.	Accounts will be frozen and cannot be transferred without an IRS transfer certificate.
Initiate	Engage U.S. tax counsel to initiate the IRS transfer certificate process — submit the estate tax return (or a preliminary submission) and supporting documentation to the IRS.	The IRS transfer certificate process can take several months. Initiating it early — ideally within the first 60 days after death — reduces delays in estate administration.
Coordinate	Coordinate the transfer certificate application with the estate tax return filing.	The IRS will issue the certificate when satisfied that estate taxes have been paid or adequately secured.

Section 5

U.S. Probate & Estate Administration

U.S. real property held in the decedent’s name will generally need to pass through U.S. probate before it can be transferred to heirs — the procedure varies by state and by the facts of the estate.

Identify any U.S. real property held in the decedent’s name and determine the applicable state probate procedure.
Engage U.S. estate counsel in the relevant state to open a probate proceeding — and coordinate timing with the U.S. tax counsel handling the Form 706-NA and transfer certificate.
Coordinate the U.S. administration with any parallel estate or succession proceeding in the foreign jurisdiction — including consistency of asset values and beneficiary designations.
Obtain U.S. taxpayer identification numbers (ITINs or EIN for the estate) for the estate and for any foreign heirs who will be receiving U.S. assets and have U.S. tax filing obligations.

Questions About a Cross-Border Inheritance?

Concepción Global PLLC advises U.S. persons receiving foreign inheritances and families navigating U.S. estate tax compliance for non-resident alien decedents. We work in English, Spanish, French, and Portuguese, with offices in Miami, Madrid, and Paris. Christine Alexis Concepción, Esq. caconcepcion@
concepcionlaw.com | +1.305.444.6669 201 South Biscayne Boulevard, Suite 2832, Miami, Florida 33131 concepcionlaw.com

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