Friend of mine had a tax question, which raised an interesting scenario.

He is a US citizen, with family ties to Europe.. He inherited some property abroad when his father passed. At this point he's in the process of selling said property. But he has a question with regards to the funds.

Since there is no Estate Tax presently (or when he inherited said property), theoretically he is not subject to any taxes on acquiring title to the property as far as the US is concerned. Now, since the proceeds from the sale are essentially still an inheritance - would he be liable for any US taxes on the funds? Can he transfer the funds to the US? What sort of declaration / proof would they expect as far as the origin of the $$?

He seems to think that he would be taxed on the money, or questioned as to it's origin. The debate is whether this money is taxable or not due to the fact that it's original source was the inheritance.

Anyone have any knowledge / ideas??

Thanks,

George

__________________
George Androulakis

Former Mb's:

1990 500sl R129 - 76k Original Miles - New project - Follow the saga http://90r129.blogspot.com/
1990 190E 2.6 148k mi (sold)
1989 420 SEL 246k mi (sold)
1995 C220 175k mi (sold)
1992 190e 2.6 74k original miles (sold)
2000 c230 Kompressor 122k miles (RIP)
1996 C220 149k mi (sold)
2000 C230 Kompressor Sport 127k (sold)

Current Cars:

2009 Mercedes c300 4matic
2006 Mercedes s430
2005 Jaguar XJR
2003 Cadillac Escalade