Interest Income from Bank in Sweden

[SANDR]

We live in Florida; however this is a question regarding Federal Income Taxes.
My husband is a citizen of Sweden and the USA. We live in the USA (past
6 years). His parents, who reside in Sweden, sold their home in Sweden
recently and gave my husband the SEK equivalent of approximately $30,000 USD.
This occurred the beginning of March 2005 and my husband deposited this money into a savings account in a Swedish Bank. How is this shown on our US Income Tax? What country declares what as far as taxes paid and /or interest income that's derived from this account? What is the Income Tax Treaty? and what does it mean to us? What forms must be used?
Does the US Treasury also have to be notified?
Thank you for any assistance and advice you can provide!

[LdiJ]

Originally Posted by SANDR

We live in Florida; however this is a question regarding Federal Income Taxes.
My husband is a citizen of Sweden and the USA. We live in the USA (past
6 years). His parents, who reside in Sweden, sold their home in Sweden
recently and gave my husband the SEK equivalent of approximately $30,000 USD.
This occurred the beginning of March 2005 and my husband deposited this money into a savings account in a Swedish Bank. How is this shown on our US Income Tax? What country declares what as far as taxes paid and /or interest income that's derived from this account? What is the Income Tax Treaty? and what does it mean to us? What forms must be used?
Does the US Treasury also have to be notified?
Thank you for any assistance and advice you can provide!

You would report the interest on your 1040 just as you would report any other interest income (converted into US dollar figures of course). As far as any tax liability in Sweden is concerned....I don't know Swedish tax law. The tax treaty does not appear to exempt interest income, although you might want to review the treaty yourself.