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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7225
Experience:  15years with H & R Block. Divisional leader, Instructor
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US estate tax for foreigners

Resolved Question:

My wife and I are non US residents and non US citizens. I have three questions regarding US Estate Tax for foreigners: 1. If I have American registered ETFs or mutual funds in a European (offshore) bank account, am I subject to the US Estate (inheritance) tax? 2. If my wife and me have a joint account in a US bank with ETFs and mutual funds, if one of us pass away, will the remaining one have to pay Estate tax? 3. If my wife and us have a joint account in a US bank, from which size of account (sum of money) we have to pay US estate tax if one of us or both of us passed away?Thanks in advance for your help in this matter. Yossi Lerner XXXXX@XXXXXX.XXX
Submitted: 2 years ago.
Category: Tax
Expert:  Robin D. replied 2 years ago.

Robin D :

Hello and thank you for using Just Answer.


Assets that are exempt from U.S. estate tax include securities that generate portfolio interest, bank accounts not used in connection with a trade or business in the U.S., and insurance proceeds. As long as you are both nonresident and the accounts are not used in business then there would be no estate tax in the US should one of you pass away.


Deceased nonresidents who were not American citizens are subject to U.S. estate taxation with respect to their U.S.-situated assets. U.S.-situated assets include American real estate, tangible personal property, and securities of U.S. companies. A nonresident’s stock holdings in American companies are subject to estate taxation even though the nonresident held the certificates abroad or registered the certificates in the name of a nominee.

Customer:

Dear Robin,

Customer:

Dear Robin, Thank you for the quick reply. I would like to be sure that I understood you correctly. In the first paragraph you indicated that non residentd bank investments are not subject to US estate tax. In the second paragraph you wrote that stock holding of non residents are subject to estate tax even if the stocks are held in offshore bank. I am refering to my three original questions: 1. If we have US stocks and US bonds ETFs, the ETFs are registerd offshore and held ina offshore bank, are all these ETFs (bonds and stocks) subject to US estate tax? 2. If the answer to the previous question is positive (meaning we are subject to estate tax), and our account is a joint account, if only one of us passed away, should the remaining one pay the estate tax? 3. What is the minimal size of account (a joint account) which is subject to estate tax (I read somewhere that there is no tax for up to $60,000, is there a difference for a joint account)? Yossi Lerner

Robin D :

The stocks would be subject to US Estate tax. The estate of the spouse that passes would be responsible for filing the return and any tax on the half owned by the deceased spouse. You are correct that there are deductions (the $60,000 you mentioned). Estate tax is due when a nonresident alien’s estate transfers U.S. situs assets above $60,000. The deceased spouse's share of the account would be transferred to the surviving spouse and it is that portion that would be subject to tax. The joint account only splits the shares and does not protect the estate of the deceased spouse from the tax.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7225
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 3 other Tax Specialists are ready to help you

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