Legal Question in Tax Law in New York

Re: inheritance from overseas

While the person receiving an inheritance is not subject to U.S. tax under U.S. tax rules, you should keep in mind that there is an informational filing requirement if the inheritance is from an nonresident alien or foreign estate. The reporting is done on Form 3520. See instructions to form at the IRS website:

http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

You should also consider income tax consequences with respect to a sale of the house as the prior response from counsel has already noted. You may also need to consult a U.K. tax advisor on any U.K. tax implications.

Disclaimer: Please note that the above is only for informational purposes. It does not create an attorney-client relationship. Proper legal advice can only be given after we have a signed engagement letter and we have discussed fully the facts in your particular case.

Re: inheritance from overseas

There will probably be an inheritance tax payable in the UK. Your cost basis for the house is the fair market value at the time of your dad's death. You subtract the cost basis from the proceeds of sale and this is your taxable gain, if any.

As a U.S. citizen your worldwide income is subject to US tax. If there is an income tax imposed by the UK it can be claimed as a credit to reduce your US income tax.