United States Tax Laws for sale of property inherited in Poland

I am about to sell inherited property that belonged to my mother and grandmother in Poland ( Krakow) before WWII. They were both Survivors. My question is whom do I speak to regarding US tax laws from proceeds from sale of this property.

Would it be acceptable to post this question on the Discussion group mailing list? I understand that this mailing list is for geneaology. My discovery of this property came as part of my geneaological research. I lived in Poland for 4 months in order to conduct this research.

Where can I post a question about finding tax lawyers who can help me with this question?

I assume I am not unique, as I know that descendants of Survivors do inherit and sell their property in Poland all the time. The question is what do they do with the money? Are they taxed on it whether or not they bring it into the United States?

Thank You.
Ben Teitelbaum

Hi there,

I'm not an expert on inheritance law / real estate law, but if I were you I would first contact Polish Consulate and inquire there first. Since the property is in Poland, Polish laws will most probably apply and you will have to prove your family ties. As far as the taxes go, I am not sure. But they should be able to give u some pointers, I'm assuming. I don't know if Polish Embassy can assist you with this matter. You could also hire a real estate/inheritance lawyer, which will certainly be costly. Bringing the money to the US will be a separate matter. I would inquire within the US Consulate, I guess.

Good luck to you :)

Ben, You are a US citizen, correct? You are therefore taxed on your worldwide income by the IRS, and will need to pay long-term capital gains tax on the sale of the property (currently 15%). This will be offset by any tax you pay to Poland on the sale (perhaps none).

You may have difficulty assesing the capital gain on the property. Normally (in the case of US property), some sort of assessment would have been done for the tax return filed by the estate to the IRS when the property was inherited. A value to the property would have been assigned at that time. Your situation may be different, unless you inherited the property from US citizens. It may be the case that the Polish notary act that gave you title to the property has a value that the IRS will find acceptable.

I think you have a fairly straightforward case on the IRS side of things. Any family / estate planning lawyer should be able to sort you out.

good luck

You could ask a Polish valuer to do an assessment of the value of the property at the time of inheritance. They're all licensed and recognised by the court, so their conclusions are as close as you can get to a definitive value.

Given it is an inheritance in direct line ( grandmother,mother, son), you should not pay much in terms of Succession/inheritance taxes no matter the value.

The best is to ask the IRS in the US about the rate of succession taxes in direct line because there are millions of Americans who buy property abroad and millions who inherit properties abroad from their relatives.

Aren't all of these... descendants of Survivors just give It to the poor and needy ? That's what I heard.

This is not the question whether the heirs are descendants of survivors from the death camps or not, they are entitled to this money it is theirs just as if your grandfather had owned a place in Italy or in Mexico and you inherited it.

If you need the money yourself why give it to the poor and needy?
In my opinion Datetree can inherit legally, sell his ancestors place, pay his succession taxes in Poland to the Notary , exchange it against US Dollars if he wishes and get in touch with the IRS in the US to check if he has anything extra to pay which I doubt.

if you're a US citizen you will have to pay up to the piper. as inheritance goes though, if the property isn't super high value then your tax shouldn't be that bad. talk to an accountant about this. (US). i wouldn't really do much in PL besides selling. you won't get a straighforward answer no matter how hard you try.

if it was me, i'd change the money to euros and leave it there invested in one of the markets there.

if you're not a US citizen then don't ever mention this to US and still leave the dough on the other side of the pond.

I heard that ING offers term accounts in Euros in Poland but will Poland really join the euro zone one day and when, isn't it better in PLN?

The inheritance tax in Poland is based on your relationship to the deceased. If you are a son or daughter, it is 3%. The basis is determined at the time of inheritance and the tax is due within 30 days of the inheritance proceeding being complete.

With regard to the Euro and the PLN, they will be linked in 2009.

SKS Legal has an attorney named Slawomir Luczak who handles taxes. His information is:
Soltysinski, Kawecki & Szlezak
ul. Wawelska 15 B
02-034 Warszawa
tel. + 48 22 608 7056
fax + 48 22 608 7070
Slawomir.Luczak@skslegal.pl

As far as the US goes, there is a tax Treaty with Poland but I am unsure how inheritance is taxed. Basically, if the estate is worth more than the amount that the IRS has determined for the year your mother died, then you pay estate tax on the amount over the limit. Talk to an international tax attorney in the US to confirm.