How Do Multiple Heirs Report a Shared Foreign Inheritance to the IRS?
Each U.S. person who receives more than $100,000 from a nonresident alien individual or foreign estate must file their own Form 3520. When siblings or other heirs share a foreign inheritance, every qualifying heir files separately based on their individual share, and each tracks their own cost basis if property is involved.
Form 3520 filing for multiple heirs:
| Scenario | Who files Form 3520? |
| 3 siblings inherit $450,000 total ($150,000 each) | Each sibling files (each exceeds $100,000) |
| 3 siblings inherit $240,000 total ($80,000 each) | No filing (no one exceeds $100,000) |
| 2 siblings: one gets $200,000, the other gets $50,000 | Only the $200,000 recipient files |
| Inheritance received in installments over the years | File in each year the annual aggregate exceeds $100,000 |
Shared property rules:
- Each heir’s basis is their proportionate share of the stepped-up FMV on the date of death
- If one heir buys out another, the purchasing heir adds the buyout price to their basis
- Rental income from shared foreign property is split proportionally, and each heir reports their share on Schedule E
- Sale proceeds are split per ownership share, and each heir reports their gain on their own Form 8949 and Schedule D
Example (3 siblings inherit a German property worth $600,000):
| Item | Each sibling’s share |
| Stepped-up basis (1/3 of $600,000) | $200,000 |
| Form 3520 reporting | Yes ($200,000 > $100,000) |
| Sale proceeds (1/3 of $750,000) | $250,000 |
| Capital gain per sibling | $50,000 |
| Foreign tax credit per sibling | 1/3 of German tax paid |
Additional filings each heir may need:
- FBAR: If you have signature authority over shared foreign bank accounts holding estate proceeds, and the aggregate of all your foreign accounts exceeds $10,000
- Form 8938: If your share of inherited foreign financial assets puts you above the FATCA threshold
- Form 1116: Each heir claims their proportional share of foreign taxes paid
For foreign inheritance reporting help, see our Foreign Inheritance Tax Guide.
Last updated on April 29, 2026
