Question #193
Inherited Individual Retirement Account
I’m an American with permanent residency living in Japan and married to a Japanese citizen. I’ve been in Japan since 1994. Recently my American father died leaving me a 401K IRA (Individual Retirement Account). My father has never lived in Japan and has no Japanese property. When I take this money from the IRA I will have to pay US taxes but I can choose how to take it. I can take it in one large lump sum or have it spread out over ten years into smaller payments. For American taxes spreading it out into smaller payments is a slightly better option. However I know I will have to report this money to the Japanese tax office as inheritance. For that which would be better? One large payment or many smaller payments? I do not believe I will go over the ¥48,000,000 threshold (¥30,000,000 + 6,000,000 x 3 heirs) but I do not know what to do. Any advice would be appreciated.
Category: Inheritance
2021-06-17 07:50
Answer #1
2021-06-25 14:12
When the total amount you receive is less than 48 million yen, and if no other heir has ever lived in Japan, the inheritance tax won't occur whether you take the money in one ...
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Ryosuke Kimura
Attorney-at-law & Tax Accountant