To transfer inheritance money to the US, you generally arrange an international wire from the foreign estate or bank to your U.S. account using the SWIFT network, after gathering authenticated estate documents proving your right to the funds. The inheritance itself is not taxed as U.S. income, but crossing certain dollar thresholds triggers separate reporting forms with steep penalties for missing them.
The work sits in three places: proving to the sending bank that you’re entitled to the money, moving the funds efficiently across currencies and banking systems, and filing the right federal forms on the U.S. side.
Is a Foreign Inheritance Taxed in the US
The principal you inherit from a foreign estate is not taxable income. Federal law excludes the value of property received through a bequest or inheritance from gross income, and this applies whether the estate is in the United States or abroad, and regardless of size.1Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances
The exclusion covers the property itself. Anything the property earns after you receive it, such as rent, dividends, or interest, is taxable as part of your worldwide income.1Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances If the foreign estate earns income before distributing your share, the income portion of that distribution may also be taxable to you as beneficiary.2Internal Revenue Service. Foreign Trust Reporting Requirements and Tax Consequences
If the foreign country imposes its own inheritance or estate tax before you receive the funds, claiming a U.S. foreign tax credit for that amount is generally difficult. Because there is typically no corresponding U.S. estate tax on the same assets, the credit has nothing to offset. Some bilateral estate tax treaties provide limited relief depending on the country and estate size.
Documents You Need Before the Money Can Move
Before any funds cross a border, you need paperwork proving your legal right to the inheritance. Start with a certified death certificate issued by the government where the decedent lived. You also need the foreign equivalent of a grant of probate or letters of administration, the document that names the executor and identifies which beneficiaries can receive assets. The name and format varies by country, but the function is the same everywhere.
Foreign-issued documents generally need authentication before a U.S. bank or agency will accept them. If the country is a party to the Hague Convention of 1961, you can obtain an apostille, a standardized certificate verifying the document’s authenticity without further legalization.3HCCH. Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents The apostille is issued by a competent authority in the foreign country, not the United States, and confirms the signature, capacity of the signer, and identity of any seal.4Department of State. Preparing Your Document for an Apostille Certificate For countries outside the Hague Convention, a more involved legalization process through the foreign country’s embassy or consulate is typically required.
Documents in a language other than English generally need a certified English translation. The translator must certify in writing that the translation is accurate and that they are competent to translate from the foreign language into English. Notarizing the translator’s certification adds a layer of verification that many institutions expect. Have your valid passport and Social Security number ready as well; receiving institutions will use them to verify your identity during the transfer.
How the Wire Transfer Works
International inheritance transfers typically move through SWIFT, the standard messaging network banks use for cross-border payments. Give the foreign bank or estate executor your U.S. bank’s routing number, your account number, and the bank’s SWIFT/BIC code, which is a unique identifier for the receiving institution.
After the transfer is initiated, funds often pass through one or more intermediary banks that bridge different national banking systems. The process generally takes three to five business days. Delays can occur depending on the countries involved, the currency being converted, and compliance reviews at intermediary banks. Your receiving U.S. bank will likely run its own compliance check on any large incoming international transfer, comparing the deposit against the inheritance documentation you can provide.
Fees and Currency Conversion
Several fees stack on international wires. Your U.S. bank will typically charge an incoming wire fee, and the foreign bank may deduct its own processing fee from the transfer amount. Intermediary banks can also take a cut.
Currency conversion is often the largest hidden cost. Banks commonly add a markup above the mid-market exchange rate when converting foreign currency into U.S. dollars, which on a large inheritance can amount to thousands of dollars. Comparing your bank’s offered rate against the mid-market rate on the day of conversion shows you how much the markup costs. For very large inheritances, some beneficiaries use specialized foreign exchange services that offer tighter spreads than traditional banks. You can also consider having the foreign estate convert the funds before sending, or receive them in the foreign currency and convert on the U.S. side, depending on which institution offers the better rate.
Form 3520 If You Receive More Than $100,000
If you receive more than $100,000 in total from a foreign estate during a single tax year, you must file IRS Form 3520 to report the inheritance.5Internal Revenue Service. Instructions for Form 3520 The form is informational and creates no tax bill. A separate, lower threshold applies to gifts from foreign corporations or partnerships; that amount is adjusted annually for inflation and was $20,116 for the 2025 tax year.6Office of the Law Revision Counsel. 26 USC 6039F – Notice of Large Gifts Received From Foreign Persons
On the form, you report the date of each distribution, the total value, and a fair market value assessment of all assets, whether cash, real estate, or securities. The $100,000 threshold applies to the aggregate amount received from a single foreign estate, so multiple smaller transfers during the year must be totaled together. If they combine to cross the threshold, you still owe the filing.
Form 3520 is due April 15 for calendar-year taxpayers, the same day as your individual income tax return. Filing Form 4868 to extend your income tax return automatically extends the Form 3520 deadline to October 15.5Internal Revenue Service. Instructions for Form 3520 If you live and work outside the United States, you receive an automatic extension to June 15 without filing anything extra.
Missing the deadline is expensive. The IRS can impose a penalty of 5% of the inheritance amount for each month the form is late, up to 25% of the total value.6Office of the Law Revision Counsel. 26 USC 6039F – Notice of Large Gifts Received From Foreign Persons On a $500,000 inheritance, that runs up to $125,000 for a form that carries no tax liability.
FBAR If the Money Sits in a Foreign Account
A separate obligation applies if the inherited funds sit in a foreign bank account, even briefly, before you transfer them. Any U.S. person with a financial interest in or signature authority over foreign financial accounts must file FinCEN Form 114, commonly called the FBAR, if the combined value of all foreign accounts exceeds $10,000 at any point during the calendar year.7eCFR. 31 CFR 1010.350 – Reports of Foreign Financial Accounts The threshold is based on aggregate balances across all your foreign accounts, not any single one.
The FBAR focuses on the account, not the inheritance. You list each foreign bank’s name, the account number, and the highest balance the account reached during the year. It’s filed electronically through the Financial Crimes Enforcement Network (FinCEN), separately from your tax return. The annual deadline is April 15, with an automatic extension to October 15 requiring no request.8FinCEN. Due Date for FBARs
Penalties depend on whether the violation was willful. Non-willful violations carry a statutory base penalty of up to $10,000 per account, per year, adjusted annually for inflation. No penalty applies if the violation was due to reasonable cause and the account balance was properly reported elsewhere. Willful violations run up to the greater of $100,000 (also inflation-adjusted) or 50% of the account balance at the time of the violation, and the reasonable cause exception does not apply.9Office of the Law Revision Counsel. 31 USC 5321 – Civil Penalties The FBAR applies even if the account produces no taxable income and even if you inherited it rather than opening it yourself.
Form 8938 Under FATCA
You may also need to file IRS Form 8938 under the Foreign Account Tax Compliance Act if your foreign financial assets exceed certain thresholds. Form 8938 covers a broader range than the FBAR, including foreign stocks, bonds, partnership interests, and financial instruments held outside a bank account.10eCFR. 26 CFR 1.6038D-3 – Specified Foreign Financial Assets
Thresholds depend on your filing status and whether you live in the United States. Single filers living in the U.S. must file if foreign assets exceed $50,000 on the last day of the tax year or $75,000 at any time during the year. Married couples filing jointly and living in the U.S. must file if foreign assets exceed $100,000 on the last day or $150,000 at any time. Married filing separately in the U.S. uses the same thresholds as single filers.11Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets?
Inherited foreign assets that push you over these thresholds, even temporarily while waiting to transfer funds, trigger a Form 8938 filing with your income tax return. Missing this filing carries an initial penalty of $10,000. If the form is still unfiled 90 days after the IRS sends you a notice, an additional $10,000 penalty accrues for every 30-day period, up to a $50,000 maximum in continuation penalties.12Internal Revenue Service. International Information Reporting Penalties
Form 8938 and the FBAR are separate requirements with different thresholds and different filing destinations. Filing one does not satisfy the other. If your inherited foreign assets are large enough, you may need to file both.
If You Inherit Foreign Property and Later Sell It
Inherit foreign real estate, stocks, or other property and later sell it, and you’ll owe capital gains tax on any increase in value. Your tax basis, the starting point for calculating the gain, is generally the fair market value of the property on the date the decedent died, not what they originally paid.13Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent This stepped-up basis can significantly reduce your taxable gain.
If your relative purchased a property abroad for $100,000 decades ago and it was worth $400,000 when they died, your basis is $400,000. Sell it later for $420,000 and you owe capital gains tax only on the $20,000 difference, not the $320,000 rise since original purchase. A reliable appraisal of the property’s value at the date of death is essential for establishing this basis, particularly for foreign real estate where comparable sales data can be hard to obtain.14Internal Revenue Service. Gifts and Inheritances
If You Already Missed a Filing
Penalty relief may be available if the failure was due to reasonable cause and not willful neglect. For Form 3520, the IRS will waive penalties if you show your failure was caused by reasonable circumstances and that you acted in good faith.15Internal Revenue Service. Failure to File the Form 3520/3520-A Penalties Common examples include reliance on a tax professional who gave incorrect advice, or a genuine lack of awareness of the requirement despite acting responsibly.
For FBAR violations, the statute explicitly provides that no penalty applies to non-willful violations if the failure was due to reasonable cause and the account balance was properly reported on other filings.9Office of the Law Revision Counsel. 31 USC 5321 – Civil Penalties The IRS also offers voluntary disclosure programs for taxpayers who come forward before an audit begins, which can substantially reduce or eliminate penalties. Addressing a missed filing proactively, before the IRS contacts you, significantly improves your chances of relief.