Inheritance from Russia to a Russian-American 2026: Taxes, Form 3520, FBAR and How to Bring the Money to the US
Will the US Tax My Russian Inheritance?
The single most reassuring fact first: the United States does not tax a foreign inheritance. If your mother in Moscow leaves you money or an apartment, the inherited amount is not US income tax to you as the heir. The US taxes the estates of US decedents, not the gifts a US person receives from a foreign person. So the principal isn't taxed.
That doesn't mean you can ignore the IRS. There are reporting rules — and the penalties for missing them are brutal, even though no tax is owed. For Russian speakers, the post-2024 environment (treaty terminated, sanctions in place) adds banking complications on top.
The $100,000 Trap: Form 3520
If you are a US person and you receive more than $100,000 in a year from a foreign estate or individual, you must file Form 3520 — an information return, not a tax bill. It's due with your tax return (including extensions). Miss it and the penalty under IRC §6677 can reach 25% of the gift.
| Amount inherited from Russia | Form 3520 required? | US tax on principal? |
|---|---|---|
| Under $100,000 | No | No |
| $100,000 or more | Yes (information only) | No |
| Income earned after you inherit | Reported normally | Yes (interest, rent, gains) |
The distinction matters: the inheritance itself is tax-free, but income it later generates — interest on the account, rent on the apartment, gains when you sell — is taxable to you as a US resident.
FBAR and FATCA — Reporting the Russian Account
If you inherit a Russian bank account and its balance (combined with your other foreign accounts) exceeds $10,000 at any point in the year, you must file an FBAR (FinCEN Form 114) with the Financial Crimes Enforcement Network. If holdings cross the higher FATCA thresholds ($50,000+ single / $200,000+ abroad), you also file Form 8938 with your return. These are separate filings from Form 3520, and each has its own penalties.
What Does Russia Charge?
Good news on the Russian side: Russia abolished inheritance tax in 2006. Heirs generally pay only a notary state fee (госпошлина) to register the inheritance: roughly 0.3% of the estate value for close relatives (capped at 100,000 RUB) and 0.6% for others (capped at 1,000,000 RUB) under НК РФ ст. 333.24. To inherit from abroad you typically grant a Russian power of attorney to a relative or lawyer to handle the notary and registration.
The Hard Part in 2026: Getting the Money to the US
Since the US-Russia tax treaty was terminated on 16 August 2024 and sanctions remain, you can't simply wire rubles from a sanctioned Russian bank to Chase. Russian speakers use third-country routing:
- Armenia — Ameriabank, Evocabank: open an account, receive from Russia, then SWIFT to the US.
- Kazakhstan — Halyk Bank, Kaspi: similar bridge.
- Georgia — Bank of Georgia, TBC.
You must still comply with OFAC sanctions (31 CFR Part 587) — funds can't originate from a blocked person or institution. Keep a clean paper trail: inheritance certificate, notary documents, bank statements showing the chain. US banks will ask for source-of-funds documentation on a large incoming wire.
Case: Mikhail, Brighton Beach 11235 — 8M RUB Under the Threshold
Mikhail inherited about 8,000,000 RUB (~$90,000) from his mother. Because it was under $100,000, he did not have to file Form 3520. He opened an Ameriabank account in Yerevan, moved the funds out of Russia, then wired them to his US account with the Russian inheritance certificate and notary papers as source-of-funds proof. No US tax on the principal; he only reports interest going forward.
Case: Tatiana, Sunny Isles 33160 — Moscow Apartment, $240,000
Tatiana inherited her grandmother's Moscow apartment, sold it for roughly $240,000 equivalent, and routed the proceeds through Kazakhstan. Because the amount exceeded $100,000, she filed Form 3520; because the temporary Russian account topped $10,000, she also filed FBAR. The sale gain (sale price minus the value at the date she inherited — her stepped-up basis under IRC §1014 for US-situs is different, but for foreign property she used fair value at death) was reported on her US return. With clean documentation the wire cleared after a compliance review.
Mistakes That Cost Russian Heirs Thousands
- Skipping Form 3520 because "there's no tax" — the 25% penalty applies to the information failure, not to tax owed.
- Forgetting FBAR on the temporary foreign account used to move the money.
- No source-of-funds trail — a $200,000 wire with no inheritance papers gets frozen for review.
- Assuming the old treaty still helps — it was terminated in August 2024.
How SafeBridge Helps
SafeBridge works with Russian-speaking families across NY, NJ, and FL who inherit assets and then need to protect them — a newly inherited home (homeowners coverage), an investment property (landlord/dwelling policy), or the umbrella that shields a larger net worth. SafeBridge is not a law or tax firm and does not provide legal or tax advice — consult a CPA and an estate attorney experienced with foreign inheritance. Questions: (315) 871-0833 · data@truckernavi.com · NY/NJ/FL · RU/EN/UA.
Frequently Asked Questions
Is a Russian inheritance taxed in the US?+
No. The US does not tax foreign inheritances received by a US person. The principal you inherit is not US income tax. Only income it later generates (interest, rent, gains) is taxable.
When do I file Form 3520?+
When you receive more than $100,000 in a year from a foreign estate or individual. It's an information return filed with your tax return; missing it risks a penalty up to 25% under IRC §6677.
Do I need to file FBAR for an inherited Russian account?+
Yes, if your foreign accounts combined exceed $10,000 at any point in the year. File FinCEN Form 114; large holdings may also require Form 8938 (FATCA).
Does Russia charge inheritance tax?+
No. Russia abolished inheritance tax in 2006. Heirs pay only a notary state fee (госпошлина) — about 0.3% for close relatives (max 100,000 RUB) under НК РФ ст. 333.24.
How do I transfer the money after sanctions?+
Russian speakers route through third-country banks — Ameriabank (Armenia), Halyk/Kaspi (Kazakhstan), Bank of Georgia — then SWIFT to the US, keeping OFAC-compliant source-of-funds documentation.
Does the US-Russia tax treaty still help?+
No. The treaty was terminated effective 16 August 2024, removing prior relief. Plan transfers and reporting without relying on it.
Is the sale of an inherited Russian apartment taxable?+
The inheritance isn't, but a later sale gain is. You generally use the fair value at the date of death as basis; gain above that is reported on your US return.
What documents prove source of funds?+
The inheritance certificate, notary registration papers, and bank statements showing the chain from the Russian estate through any third-country account to your US bank.
What if I inherit under $100,000?+
No Form 3520 is required and there's no US tax on the principal. You still report any income it earns and file FBAR if account thresholds are crossed.
Can my relative handle the Russian paperwork for me?+
Yes. Most heirs abroad grant a Russian power of attorney to a relative or lawyer to handle the notary, registration, and any property sale.
Will a US bank question a large incoming wire?+
Yes. Expect a compliance/source-of-funds review on a six-figure wire. Clean inheritance and notary documentation usually clears it within days.