Expert: Henning Haarhaus - 10/30/2008

Question
QUESTION: MY German Mother died (father is also deceased) and left an inheritance for my
brother and me.  I am a US citizen.  What are the tax consequences US or
German?

ANSWER: In principle, you are subject both to German and American inheritance taxes.

---------- FOLLOW-UP ----------

QUESTION: Is there any way to be a bit more specific?  All monies were derived from German
sources and taxes were paid on that income.   Are there some general guidelines
that may apply and be of help?  The amount in question is not great; less than
$400k.

ANSWER: I cannot understand what $ 400k would mean. In Germany, each child can claim for a inheritance tax exemption for 205.000 Euros. However, they will have to file an inheritance tax return even if the issue will not result in a tax burden.

---------- FOLLOW-UP ----------

QUESTION: Sorry for the lack of clarity, $400k means $400,000.  You state that in Germany,
"each child" can claim an exemption.  Does that apply to me, a naturalized US
citizen?  So I am still in a quandary regarding German tax liability.  Thanks, your
help is appreciated.

Answer
Yes, I told you that before because the deceased lived in Germany.

Please revise your rating.



Supposed that your brother and you each inherited 200.000 US$ there would not be a German tax lability.  

In the US I suppose the tax exemptions are more generous.