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The following was written about a year ago by a participant to another board, so I thought I'd bring it up on the appropriate board:

“A person who is not a US citizen or resident who owns US-issued stock held at a US brokerage is subject to full US estate tax when he/she croaks--something like 55% on US stock and US mutual funds above $60,000, since the new larger exemptions for US citizens don't apply


Does said participant know what (s)he's talking about?

I ask because I've never heard of a nonresident alien's being subject to US estate taxes simply because assets are located in the US. That doesn't mean it's not true, just that I haven't heard of it. It has a gracious plenty of company.


Well, apparently it's true, at least to some extent. There is a Form 706-NA which applies to the estate's of non-resident aliens (as well as the estates of certain other types of individuals). There is extensive cross-reference to the regular Form 706 instructions with a much lower unified credit. There is also reference to adjustments required for estates which are subject to estate taxes in certain countries with US tax treaties.

I haven't looked at the instructions in depth, so I don't feel qualified to comment any further. Suffice to say, anyone who thinks they may be subject to this tax in the future should seek competent counsel now if they wish to minimize the impact of this tax on their heirs.

Ira
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