Living in US / Inheriting assets in Switzerland - IRS reporting

Inheritances are not normally subject to income tax in the US. And there is no estate tax in the US when the decedent is neither a US citizen nor has assets in the US.

What does matter is how large the gift is, and where it is kept. If the gift to a US citizen from abroad exceeds $100,000, then IRS Form

In addition to that, if a US citizen or permanent resident had any "financial assets" that, in the aggregate, exceeded $10,000 at any time during the year, they are also required to file a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114.

And yes, if your father died in 2022, you report for 2022 because that is when you became the legal owner (even though it wasn't actually under your control at that time).

I don't profess to be an expert on this subject, but I believe that Stu's last paragraph is incorrect. There is no inheritance until either someone receives a distribution or obtains control over the inheritance. In other words, until this US resident was able to withdraw, transfer, move, etc. the inheritance there is no filing or reporting requirement as there is no inheritance. It seems to me based on the statements in the post, that this is a 2023 inheritance because his control (the legal ability to access) did not happen in 2022. That said, don't forget about FATCA and Form 8938 requirements. If the amount exceeds the peak value and/or the year-end value in 2023, then the 8938 is required in addition to the FBAR. Healthy penalties for failing to file the FBAR and the 8938.

I based my last statement on the fact that (at least in the US, and from what I can tell probably in Switzerland too) an inheritance is legally considered the property of the beneficiary immediately after the testator's death, subject to estate administration. And generally the IRS follows state laws when it comes to rules on ownership. For example when there is community property, the IRS requires half of community income to be reflected on each spouse's tax return.

It is possible that, for Form 3520 and FBAR that the rule only requires reporting when the person has actual control over funds rather than just the legal right to them. But I haven't been able to find confirmation either way with a brief research on the subject.