Guten Tag, Everyone,
I am looking for some expert advice regarding the taxation of German "Erbengemeinschaft" property rental income for a US citizen. The scenario is here:
Older relative passed away in Germany December 2019. Inheritance was decided by German estate court in April 2020:
2 heirs, younger brother (Germany) and older brother (US citizen), in a German "Erbengemeinschaft" (community of co-heirs) of 50% each until we can divide
Several rental objects in different German cities, comprised of apartments/garages/houses
German inheritance tax and "Erbengemeinschaft" income tax in Germany are already being handled, so my question is about the US side of things
How is income and estate taxation handled between US and Germany? In Germany, income from all of the rentals is aggregated into one total sum number for the "Erbengemeinschaft" and reported onto one Form "V". We brothers don't get to claim rental income per object, but each of us then has to claim 50% of that total number on our German income tax.
In the US for worldwide income would we need to "mirror" this by claiming 50% of rental income for each rental object and filing Schedule E's for each object, then depreciate? Or, can Erbengemeinschaft income in the US also be handled like it is in Germany, more like a US probate estate or trust, where individual objects are not reported until the estate is actually settled and assets are distributed among the beneficiaries?
If depreciation, then there are several rental objects, how to partition them for depreciation, given that about half of them will go to the other brother once the Erbengemeinschaft is distributed and also several will have to be sold to pay for inheritance taxes?
There are so many knowledgeable folks here and I'm hoping that someone will know something about this area that's giving me sleepless nights recently :-)