Do I Have To Pay Taxes On An Inheritance From A Foreign Relative?

In the United States, those who receive gifts are not required to pay any gift taxes. The burden of paying the gift tax falls on the gift-giver. The same is true for those who receive testamentary gifts. The fact that the gift is from a foreign person is irrelevant.

Although gifts or inheritances from foreign persons are not subject to income tax or an inheritance tax, if the gifts of money or other property are valued over certain amounts, the recipient the gifts must report them to the IRS.

The IRS requires taxpayers to report:

  1. Gifts or bequests valued at more than $100,000 from a nonresident alien individual or foreign estate (including foreign persons related to that nonresident alien individual or foreign estate); or
  2. Gifts valued at more than $13,258 (adjusted annually for inflation) from foreign corporations or foreign partnerships (including foreign persons related to the foreign corporations or foreign partnerships).

Additionally, gifts from related parties must be combined. For example, if you receive a gift of $60,000 from your mom and $60,000 from your dad, who are Mexican citizens living in Mexico, you must report the gift because the combined gift totals more than $100,000.

If you receive a gift or inheritance that exceeds these thresholds, you will be required to file Form 3520 with your tax return for the year that the gift was made.

Failing to file Form 3520 accurately or on time may subject you to penalties of 5 percent of the amount of the foreign gift for each month for which the failure to report continues (not to exceed a total of 25 percent).

For more information, visit the IRS’s website by clicking here.

Photo courtesy of and copyright Free Range Stock,


  1. Kenny Cittell says

    Hello Ms Combs:

    For stock and bond assets that are passed on by a Non-Resident of USA Parent to a beneficiary (Son/Daughter) in excess of the limits mentioned in 8938 or 3520 forms, does the US Taxpayer have to file BOTH 8938 as well as the 3520? Of course, the assets are still outside of the US, with taxes being paid in the local country. But, assets have changed name to the US Citizen (i.e. me) in this case. Although US and the Foreign Country have a treaty where Double Taxation is not imposed. Any guidance on this front would be great. Thanks.


  2. If my wife and I are resident aliens in the US gifting from our foreign asset to our resident US citizen children an amount higher than the value restrictions listed above, would I need to pay gift taxes to my home country and US?

  3. If me and my sister are receiving an inheritance cash value of approximately $120,000 USD total (that’s about 60K$ USD each) do we still have to file with IRS cosideing moneys are going to be wired from international bank account??

  4. Carl Wermer says

    Thank you for including this on your web site. I looked at the IRS documents also, and I realize they are the final say. However, it is very nice to have a place where there is summary that is easy to read (I live in Vt).

  5. your link above “clicking here” does not work

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