US ESTATE TAX ON NONRESIDENTS WITH PROPERTY LOCATED IN THE USA

 

The United States has an Estate Tax That Will Hit Nonresidents with US property.

A deceased nonresident that owns property in the USA will be subject to  US federal estate taxes if the value of that property on the date of death exceeds $60,000.  The decedent may also be subject to state death taxes in the state in which the property is located.  The estate tax rate goes from 15% to 35% of the fair market value of the property in the U.S. that belonged to the deceased nonresident.

Nonresidents often own real estate, bank accounts, us stock and bonds, collections, and other tangible property situation in the U.S. upon their demise.  In that event if the total value of those assets exceed $60,000 a US nonresident estate tax return must be filed. They cannot leave all of their assets to their surviving spouse and eliminate any estate taxes with the marital deduction as can U.S. citizens and permanent residents.

Even nonresidents living in the US for only several years before returning to their home country may be subject to these rules depending on their tax domicile on the date of their death.

The tax return is due 9 months from the date of death but can be extended for an additional 6 months. If any taxes might be owed it is best to pay them in prior to the expiration of the 9 month period to avoid interest or penalties.

The U.S. does have estate tax treaties with 17 countries that may alter the general estate tax rules with respect to  residents of those countries which have property in the U.S. Those treaties or protocols should be reviewed carefully to determine their effect.

USA ESTATE TAX TREATIES IN EFFECT

Australia Italy
Austria Japan
Canada* Netherlands
Denmark Norway
Finland South Africa
France Sweden
Germany Switzerland
Greece United Kingdom (England)
Ireland  

* Contained in the United States - Canada Income Tax Treaty

If you are reporting any items on a nonresident Form 706NA estate tax form based on the provisions of a death tax treaty or protocol, you should attach a statement to the return disclosing the return position that is treaty based (Reg. 301.6114-1)

As a nonresident you may need help filing an estate tax return on your US property or planning in advance for you in order  to try to reduce the US estate taxes as low as possible. we have the expertise to help. Email or phone our offices.

 

 
     

 

Don D. Nelson,  US  INTERNATIONAL & EXPATRIATE TAX Attorney
All returns prepared by Kauffman Nelson LLP, CPAs
US Phone (949) 480-1235    US Fax: (949) 606-9627
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Email inquiries & questions ddnelson@gmail.com  or use our email inquiry form

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Our US Phone Number Abroad: 949-860-9606

                 

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