Bequest from Foreign Decedent: How to Report on Form 3520
Tax Research Desk
What "bequest" means for Form 3520
For Form 3520 Part IV purposes, a bequest is property received under the will or estate-distribution rules of a deceased foreign person. It is treated identically to a gift — same threshold ($100,000), same form, same Part IV line.
The IRS does not distinguish "gift" from "bequest" on the reporting line. Both are entered on Line 54 (gifts/bequests from foreign individuals or foreign estates).
What counts as a "foreign decedent"
A foreign decedent for Form 3520 Part IV is a nonresident alien individual at the time of death, or a foreign estate.
- A US citizen who died abroad is not a foreign decedent (citizenship-based).
- A green-card holder who died is not a foreign decedent (US tax resident).
- A non-US-citizen who lived abroad and died abroad is a foreign decedent.
- A non-US-citizen who lived in the US under a visa (not green-card) and died in the US is generally a foreign decedent (depending on facts).
How to fill in the form
Part IV has two tables. For bequests from foreign individuals or foreign estates, use Line 54:
| Column | What to enter |
|---|---|
| (a) | Name of foreign donor (the decedent or estate name) |
| (b) | Date you received the bequest (not date of death, not date of probate) |
| (c) | Description of property (e.g. "cash inherited", "foreign brokerage account transferred", "foreign real estate transferred") |
| (d) | Fair market value in USD at the date of receipt |
If you received multiple distributions from the same estate at different times during the year, list each separately on its own row. Same estate name in column (a), different dates in column (b).
Common edge case: "I got my inheritance in tranches"
Foreign probate often distributes assets in stages — partial cash distribution at probate filing, then more after asset sales, then the residue. If all distributions are in the same tax year, list each on a separate row of Line 54. If distributions span multiple tax years, you file Form 3520 for each year a distribution occurs (subject to the $100,000 threshold for that year alone, unless aggregated with same-year gifts from related donors).
Common edge case: "I got real property, not money"
Real estate, vehicles, jewelry, art — anything physical that comes to you under the will is a bequest. Report the fair market value in USD on the date of transfer, not the date of the decedent's death (unless they happen to be the same day, which they rarely are).
If the property has no liquid market price, get an independent appraisal as close to the transfer date as you can. The IRS will accept a credible appraisal. The appraisal goes in your records, not on the form — but be ready to produce it if questioned.
Common edge case: "I got a foreign account that's been mine for a while"
If a foreign-resident parent named you as joint owner on a foreign bank account 20 years ago, and now your parent has died and you have sole control, the account is not really a "bequest" at the moment of death — your ownership predates the death. Technically half the account was already yours, and the other half became yours at death.
If the account was clearly the parent's account and you were only on the signature card for emergency access (no real ownership), then yes, you received a bequest at the moment of death.
Distinguishing the two is a facts-and-circumstances analysis. When in doubt, treat the post-death share as a bequest and disclose. Over-disclosure does not generate penalty; under-disclosure can.
What you do NOT report on Line 54
- Life insurance proceeds from a foreign-issued policy. Reportable on Form 3520 in some cases but treated as a different category. Talk to a CPA.
- Bequests from a foreign trust. If the bequest came through a foreign trust (e.g., a Cayman testamentary trust) rather than directly from the decedent's estate, you file Part III (trust distributions), not Part IV. Talk to a CPA.
- Distributions from a foreign decedent's estate to a foreign trust set up under the will, that then distributes to you. Same as above — Part III applies once the trust is in the picture.
Filing alongside Form 1040
Form 3520 is mailed separately from your Form 1040. You do not attach it to your 1040. You do not need to mention the bequest on your 1040 at all — it is not income. But:
- If you started receiving rental income from inherited foreign property, that goes on Schedule E with your 1040.
- If you sold any of the inherited assets, the capital gain goes on Schedule D / Form 8949 with your 1040 (with stepped-up basis to date-of-death value).
- If you continue to hold foreign assets above the Form 8938 threshold, you attach Form 8938 to your 1040.
Bottom line
Bequests from foreign decedents are reported on Form 3520 Part IV Line 54, in USD at the date-of-receipt fair market value, with one row per distribution date. No US income tax is owed on the bequest itself.
3520file is software, not a CPA firm or law firm. We prepare IRS Form 3520 based on the facts you provide. For advice on your specific situation, talk to a tax attorney or CPA. The above is plain-English explanation, not tax advice.