Is Form 3520 required here?

[osiris23]

If anyone knows the answer to this, it would be greatly appreciated! I've got a foreign decedent with a US resident beneficiary. Total inheritance was about $150k in total. The death occurred in 2010. In that year, the beneficiary received $75k up front; the rest was held by the executor while some debt settlement was pending. The executor paid out the remaining $75k in 2011.

Instructions to Form 3520 says that Part IV must be completed if the US person received a bequest of 100k or more in the tax year. In this case, the bequest was more than 100K, but was disbursed in two separate tax years, so the recipient didn't actually get 100k added to his bank account in any particular year. So does he not have to file the 3520? If he does, would he need to file the 3520 for the 2010 year when the bequest arose or for the 2011 year when the 100k threshold was reached?

Thanks!

[mwcpa]

received means received.... so no filing is required if 75K was received in 2010 and another 75K was received in 2011... but if one is made it's no harm no foul.....

3520 is informational only.... no extra tax is due as the result of filing.... but if one is due and is not filed the penalties are high.....

[osiris23]

Thanks, MW! That's what I thought, but I don't deal with this on a regular basis and my friend is really nervous when it comes to the IRS. It does seem a bit odd that they want you to combine two separate gifts from related parties to reach the 100k threshold, but they don't care at all that you don't report the 100k because a second payment is made one day later in a new tax year.

I appreciate the insight!