Do I file Form 706-NA even if no tax is owed?
Estate, gift or death filing obligations of this kind are generally required on the facts rather than on the tax result, so a nil position does not remove one. Executors of non-resident, non-citizen decedents who owned US-situs assets — most often US real estate or shares in US corporations.
What happens if I have missed Form 706-NA for several years?
Missed years are dealt with as a package rather than one at a time, because the route chosen for the first year affects the relief available for the rest. We map the years and the obligations before anything is filed.
Is Form 706-NA the same as the other reports I already file?
No. The US estate tax return for the estate of a non-resident, covering property situated in the United States. Satisfying a different obligation, even one covering the same accounts or entity, does nothing for this one.
My father was never American but owned a Florida condo, does his estate file?
Possibly, and the trigger is where the property sits rather than where he lived. US estate tax for a non-resident, non-citizen decedent reaches property situated in the United States, and real estate is the clearest case of that. The question for the executor is not nationality or residence but an inventory: what did he own that was situated in the United States at death, and what was it worth. That inventory is where the engagement starts, before any conclusion about whether tax is due.
Do US shares held in my Canadian brokerage account count as US property?
For estate tax purposes, shares in US corporations are treated as US-situs property even though the account holding them is with a foreign broker. This surprises most families, because the statement arrives from a domestic institution and nothing about it looks American. The custodian's address does not decide the question. The character of the underlying holding does. So a portfolio has to be read line by line against a situs test rather than assessed as a single foreign account.
Is the exemption for a non-resident smaller than for an American?
Yes, and materially so. The amount that passes free of US estate tax for a non-resident, non-citizen decedent is far smaller than the amount available to a US person, unless a treaty between the two countries adjusts the position. That is why two estates holding identical US assets can reach opposite answers. Establishing whether a treaty applies, and what it actually changes for this decedent, is the first substantive question in the file rather than an afterthought.
Can a treaty reduce the US estate tax my parent's estate owes?
It can, where one exists between the United States and the country the decedent was resident in, and where the estate meets its terms. Treaties differ. Some adjust the amount that passes free of tax, some alter how particular assets are treated, and some require disclosure of worldwide assets as the price of the relief. None of that is automatic. The claim has to be made on the return and supported, which means the estate's worldwide position often has to be established even when only the US assets are taxed.
The US bank will not release the account until we file something?
US custodians commonly hold a deceased non-resident's account until the estate's US position has been dealt with, which is why the filing often becomes urgent for cash-flow reasons rather than tax ones. Families discover this when a transfer is refused months after the death. The practical sequence is to establish the US-situs inventory, prepare the return, and keep the institution informed of where matters stand, so the release is a step in a plan rather than a surprise at the end.
What do we as executors abroad actually have to value?
Everything the decedent owned that was situated in the United States at the date of death, valued at that date. In practice that means US real estate, shares in US corporations however they were held, and anything else the situs test reaches. Valuation is the slow part: property needs an appraisal, private holdings need support, and each figure has to be evidenced rather than asserted. Where a treaty claim is in play, the worldwide picture may be needed as well.
What is Form 1042-S and what do I do with it?
The statement a US payer issues to a non-resident showing US-source income paid and tax withheld — the non-resident counterpart to a 1099. Use it two ways. In your own country it evidences the US tax paid for credit purposes. And where the rate withheld was higher than your treaty entitlement, or the income was not taxable at all, the way back to the money is a US non-resident return claiming the refund. Check the income and exemption codes before assuming the rate was right. See Form 1042-S.
How is rental income from a foreign property taxed?
Twice over, then relieved. The country where the property sits taxes the rent — often by withholding on the gross amount, with an election available to file on the net result instead. Your residence country also taxes it, generally on net income under its own rules, and credits the foreign tax. Because the two countries compute "net" differently, the numbers rarely match without work. See the section 216 election.
