Is my inheritance from a Chinese relative taxable in the US?
September 15, 2006
Date: Thu, 24 Aug 2006
From: Mr. Webb
Dear Mr. Gray,
I am receiving a large inheritance from a Chinese relative who has recently passed away. The funds will be transferred to my bank account in America. What taxes will I have to pay to the American government? I was told by a lawyer in China that the taxes could be paid in China as opposed to paying to the US.
Thank you.
Mr. Webb
Answer
Date: Wed, 06 Sep 2006
Hello Mr. Webb,
U.S. transfer taxes are generally imposed on the transferor (the decedent's estate). Unless your relative had stock of a US company, US bonds, real estate or a business in the US, US estate tax shouldn't apply. An inheritance is not subject to US income tax, except for income received after the decedent's death.
Check with a local tax advisor about state tax consequences of your inheritance.
Good luck!
Mike Gray
For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.
Home Newsletter Archive Introducing Michael Gray, CPA Articles Tax FAQ Need Help? Other Links
Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
Our Blog