Legal Questions

Which siblings might be required to file FATCA/FBAR?

Our father, who was a U.S. Citizen, bequeathed to my 2 siblings and me foreign real-estate (raw land) after his death in 2007. These 3 separate parcels were not held by an off-shore trust, partnership, estate or corporation. Each parcel was co-owned directly through extra-judicial partition and divided evenly between the 3 siblings. All 3 siblings are U.S. citizens, reside in the U.S., are married and file joint tax returns. Cost basis of properties was stepped-up to 2007 values. My sister acts as executor and makes all the decisions regarding these properties. We had already sold two parcels of land during the last 5 years to a foreign buyer (individual) and we might have a prospective foreign buyer (individual) this year for the very last parcel. Unlike the past 2 sales, however, where the buyers were willing to pay in USD and wire transfer the proceeds in 3 equal installments to each of our 3 U.S. bank accounts, the current prospective buyer is only willing to pay in local currency. Note: The first two sold parcels were sold at a taxable loss due to a natural disaster in the region reducing their values and both transactions did not require FATCA/FBAR filings. Entire proceeds for all 3 parcels will be over the threshold value for FATCA; however, each 1/3 equal installments to be wired will be less than FATCA threshold. Once all funds have been distributed, the foreign bank account will be closed. My questions are: 1) If my sister (the executor) decides to accept this offer and and deposits the foreign currency sale proceeds in a bank account that she opens abroad (under her name only), then converts that currency into USD and wires 3 separate/equal payments to her U.S. account and to the remaining siblings, will she be the only person required to file any possible FATCA/FBAR or will all 3 of the siblings have to file? 2) Will there be any other treasury forms needing to be filed? 3) What information will be required from both foreign buyer and sellers to complete forms if needing to be filed? 4) Should we use a CPA or a Tax attorney for any required filings?

Posted - on 01/14/2018 | Illinois

Answers (1)

Neschis & Tolitano LLC

1 Contributions

Hello, I am a partner at the law firm Lohman, Neschis & Tolitano. I am an attorney and CPA and have assisted numerous clients prepare foreign tax compliance forms relating to foreign assets. You can visit my website at WWW.LNT-LAW.COM for further information on my background. Please contact me at 847-635-7877 and I would be happy to explain your legal obligations related to the foreign assets. I can also be reached via email at TTOLITANO@LNT-LAW.COM. I look forward to speaking with you. Tami Tolitano

Posted - on 01/15/2018