Convoluted inheritance IRS tax question.

What is the name of your state? CA

I just discovered this wonderful website and all of the very helpful articulate posts.

I have a difficult question I’m hoping someone can help me with.

My father (a US citizen) passed away about 5 years ago and his estate is mired in litigation and tax claims from several countries. These problems are not likely to be resolved anytime soon and I probably won’t inherit anything except for possibly a small sum from an apartment he owned in France. According to French law, real property immediately upon death gets passed on to the children. So, it is possible for me (along with my siblings) to claim ownership of this apartment, sell it, and take the proceeds (less French taxes).

My question is this: The IRS is claiming from my father’s estate a large amount owed for estate taxes and unreported income. I was told that if I sell the apartment and take the proceeds that the IRS can then go after me since his apartment was technically part of his estate. Is this true, and if so can they only go after me for the amount I received from the sale of the apartment, or can they try to get from me the entire amount claimed from my father’s estate.

Thank you!!

If there is that much money at stake, you really need to take your questions to a qualified professional. Often what the IRS "wants" and what the IRS is "supposed" to get are two different things.

There is no way we can give you a definitive answer to a multi-country, convoluted question like this.

Snipes

Follow-up question

Thank you for your reply and I recognize the truth to your fist sentence however, just to better understand this situation. Assume that all of this was in the US, If take money (as a beneficiary) from an estate that the IRS has a claim against am I then “technically” liable for the entire tax bill of the estate or is my maximum liability the amount I received?

In that case the Estate isn't supposed to give you any money until it's settled.

Theoretically, the Estate also can't give you any portion of monies that are still in question.

I do not believe, however, that a beneficiary is liable for the debts of an estate, because the beneficiaries get what's left over after debts are paid.

Snipes

Followup" (last one)

Snipes5, thank again for your reply. I realize that under normal circumstances a beneficiary is not liable for the estate debts/claims because as you said, “the beneficiaries get what's left over after debts are paid”, however, because of my unusual situation I could receive funds from the estate (in France). The amount I could receive is small and I would not want to risk all of my savings (also a small amount) if the IRS could then claim that since I withdrew funds from the estate and the estate owes $ to the IRS that I am now responsible for all or a part of that amount. Sorry if this is confusing.

It's posssible that they could hold you responsible, but sounds unlikely. However, since you know the Estate is in litigation, it would be unwise to take anything out of it until it's settled.

Snipes

Thank you. [eom]

Thank you for your advice