Steuerberater for US Inheritance

10 posts in this topic

Hello,

 

I tried to search the site & while I see many posts regarding recommendations, some were old & I think many just concern ex-pat tax returns. 

 

I am American & still a US resident but with Permanent Residence here (my wife is German). After my mother died of Covid, I received an inheritance in the US that is well into probate & my procrastinating self keeps putting this off. I need to speak with someone about what I need to do because, while the inheritance isn’t so large, I need to get a stock transfer & there is also some real estate.

 

I am so lost with these matters & would appreciate if someone could point me to someone who could help me with finding a Steuerberater to help me with this. I am hoping a lawyer isn’t necessary. 

 

Thanks for any assistance!

0

Share this post


Link to post
Share on other sites

I am not sure if he is the right fit, Jeba - thanks for the tip though & he is on the list, but, I am, primarily looking for someone who can handle a complicated tax situation here in Germany & not filing in the US. 

0

Share this post


Link to post
Share on other sites

 

 

2 hours ago, adjustment said:

I am so lost with these matters & would appreciate if someone could point me to someone who could help me with finding a Steuerberater to help me with this.

 

 

 

I can recommend @PandaMunich at https://expertise.tax.

 

My condolences. 

2

Share this post


Link to post
Share on other sites
4 hours ago, sobyrne said:

An ex-client of mine, Michael von Arps-Aubert, specializes in international inheritance taxation: https://arps-steuerberater.de/en/

His English is pretty good too. Tell him Sean sent you.

Good luck.

 

that looks like a fit - I appreciate the tip (rhyme unintended :) ) 

0

Share this post


Link to post
Share on other sites
7 hours ago, engelchen said:

 

 

I missed this one - this looks good, too. I like how they list fees on their site. I thought fees were set by law - is it just a question of one clocking more hours?

 

I can recommend @PandaMunich at https://expertise.tax.

 

My condolences. 

 

0

Share this post


Link to post
Share on other sites
9 hours ago, adjustment said:

I am American & still a US resident but with Permanent Residence here (my wife is German). After my mother died of Covid, I received an inheritance in the US that is well into probate & my procrastinating self keeps putting this off. I need to speak with someone about what I need to do because, while the inheritance isn’t so large, I need to get a stock transfer & there is also some real estate.

 

I am so lost with these matters & would appreciate if someone could point me to someone who could help me with finding a Steuerberater to help me with this. I am hoping a lawyer isn’t necessary. 

 

You do not need a lawyer but you may need a German Steuerberater.

 

Assuming you were a German resident at the time of your mother's death, the value of what you receive from your mother's estate will be subject to German inheritance tax.  If the value of your inheritance that you eventually receive plus the value of other gifts you may have received from her in the 10 years preceding her death does not exceed the Freibetrag of €400,000, then you also have no German inheritance tax concerns.

 

You have no responsibility for US estate taxes.  That will be the responsibility of the "personal representative" or executor of your mother's estate.  If your mother's estate was less than $11.5 million (and there are no state death taxes) that too will be zero.

 

If your stated desire to "get a stock transfer" is fulfilled, however, you may cause yourself future German INCOME tax issues that can be avoided by prompt and effective communication between yourself and your mother's executor/personal representative.

 

Under US tax law (IRC §1014) securities and other assets that are part of a decedent's estate enjoy a "step up" in basis to their fair market value as of the date of death.  As a result, a direct distribution of securities to an heir via, e.g. "a stock transfer", will transfer securities whose tax basis is stepped up to FMV.  The resulting gain from the sale of such securities in your hands would produce (presumably) lower taxable gain on their future sale.

 

But this step up in basis DOES NOT apply for German income tax laws.

 

Instead, if you receive a "stock transfer" of appreciated securities directly from your mother's estate, those securities will have the following characteristics in your hands:

 

1.  your date of acquisition will be deemed to be the date your MOTHER acquired them (or, if your mother inherited them, the date the person she inherited them from acquired them.)  If you can demonstrate that the acquisition date was prior to 1.1.2009 then if these are common stocks or bonds you will be able to sell them GERMAN tax-free any time.  If they are mutual funds acquired prior to 1.1.2009 then any gains from their sales will be tax-free up to the extent you have not exhausted your lifetime €100,000 exemption for such "Altfonds".

 

2.  your cost of acquisition or tax basis will be your MOTHER's cost basis.  As a consequence, you could be taxed twice on the acquisition of shares acquired in a "stock transfer":  first by inheritance tax to the extent the entire gift including the market value of the securities on the date of death exceeds the €400K Freibetrag and second by income tax on the gain realized when you sell the appreciated securities.

 

This German domestic "double taxation" has been unsuccessfully challenged in the German courts.

 

So what should you do?

 

COMMUNICATE with your mother's executor/personal representative.  If he is allowed to do so by his governing instrument (will, trust, etc.) ask him to sell securities that may cause you future income tax problems wer you receive them directly, i.e. in kind from him through a "Stock transfer".  These would include any appreciated shares, bonds and possibly mutual funds acquired after 31.12.2008 and possibly appreciated mutual funds acquired at any time. Since under US succession law, the personal representative holds legal title to these securities, the sale will arguably not be attributable to you.

 

As far as the real estate is concerned that may be something the personal representative is powerless to act on since in many states real estate does not become part of a solvent probate estate but rather, descends directly to the heir.  In other words, you may already own the real estate and consequently will not be able to avoid whatever adverse German income tax consequences (if any) that may flow to you as a result of a future sale.

 

Again, you need to COMMUNICATE.

 

1

Share this post


Link to post
Share on other sites
25 minutes ago, Straightpoop said:

1.  your date of acquisition will be deemed to be the date your MOTHER acquired them (or, if your mother inherited them, the date the person she inherited them from acquired them.)  If you can demonstrate that the acquisition date was prior to 1.1.2009 then if these are common stocks or bonds you will be able to sell them GERMAN tax-free any time.  If they are mutual funds acquired prior to 1.1.2009 then any gains from their sales will be tax-free up to the extent you have not exhausted your lifetime €100,000 exemption for such "Altfonds".

 

2.  your cost of acquisition or tax basis will be your MOTHER's cost basis.  As a consequence, you could be taxed twice on the acquisition of shares acquired in a "stock transfer":  first by inheritance tax to the extent the entire gift including the market value of the securities on the date of death exceeds the €400K Freibetrag and second by income tax on the gain realized when you sell the appreciated securities.

 

Thanks for all of this information. The stock was purchased prior to 2009 & I am sure this is recorded in her account. I was hoping to keep the stock as an investment but if it will just cost me, then I would just have the executor sell it. I am not sure what I would need to ensure this? Is this where I need the steuerberater? Excuse my struggle with legalese :) .

 

 

0

Share this post


Link to post
Share on other sites

@adjustment

 

Please carefully reread my post - especially the language you quoted - and consider whether in light of the information I provided your response makes any sense. 

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now