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Mail Bag #15: Inherited Retirement, PFIC funds, Rent Deposit, France SS, FBAR disclosure, State tax, Contractor in Japan, Repatriation Tax

Inherited Retirement

My tax circumstances have changed due to my mother’s passing away & having inherited her house & IRA – 50% with my brother).

Does that require any special filing?

I am sorry to hear about your mother’s passing.

As far as the inherited IRA – it is good that you contacted us. You have limited time to transfer your portion of your mother IRA to your own IRA. If you miss that period you will have to pay tax on the entire inherited amount. Contact the plan administrator ASAP to arrange transfer to your own (and your brother) inherited IRA accounts. Hope you already did that – then this is just another reminder.

PFIC funds

What should I do with my non-US Mutual Funds before the end of fiscal year 2017? I had to file form 8621 for 2016, I because the value of my Mutual Funds was over $25,000 USD. If I sell my Mutual Funds before end 2017, will I still have to file form 8621 with Fed Form 2017?

For 2017, yes, you must file Form 8621, because the disposition of PFIC stock itself is a reportable event for 8621, even if you no longer hold any non-US mutual funds by year end.

Rent Deposit

In regard to the Foreign Housing Deduction, can a rent deposit paid in 2017 be applied to 2018’s housing deduction? I wont actually move into the home abroad until 2018.

A rent deposit paid in 2017 may be applied only to 2017 year, as per cash accounting. Since you do not move until 2018 you cannot deduct this amount.

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