[mshafroth]

Hi,

My mother was French and held various French financial and real estate assets. When she died following French law my father became life tenant/usufruct owner of her French estate. My siblings and I became the remaindermen/naked owners of her French estate. I believe the IRS has ruled that a life estate of this sort is a foreign non-grantor trust. Since my father had the usufruct, we filed the FBAR as if he were the sole owner. Can you give us an opinion on whether our FBAR filing was acceptable and if not what should be done to rectify the past filings?

marc

 

[Bevdeforges]

Depending on the amounts involved, I wouldn't worry too much about amending past FBARs - though I would take a long hard look at how you want to file going forward. It's on your income tax filings that you need to be careful (and where the notion of a "foreign non-grantor trust" comes into play).

If your father's income (including that from the investments he holds in usufruit) is insufficient for him to have to file, then he's off the hook for the additional forms for his tax returns. The FBAR is merely a declarative form.
Cheers,
Bev

 

[mshafroth]

Thanks! We filed the income under my father since he was the usufruct owner. On July 20th he died so we will file income from July 21st on under our income.

marc

 

[Bevdeforges]

I'd just treat it going forward as something you inherited from your father. The notion of "usufruct" is not all that well understood in the US and as long as you've made a good faith effort to disclose it, whether by declaring on his returns or on the FBARs, I'd let it go and address the issue if and when someone comes back to you on it.
Cheers,
Bev