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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4373
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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I am a Singapore citizen,holding a Singapore passport and residing

Resolved Question:

I am a Singapore citizen,holding a Singapore passport and residing in Singapore.
I bought a property ( an apartment ) in Minneapolis,Minnesota for $420,000.,no mortgage and under my name.
In the event of my death,I understand I do not have to pay estate tax for the 1st million dollars.
Also I owned other assets and properties in Singapore.
If these assets/properties are more than $1 million, say $10 million,am I subject to estate tax in the US then?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Lane :

Hi,

Lane :

Please don't shoot the messenger here (hopefully having all the facts will help you "see around some corners") but for Real estate your ESTATE will have to file a gift tax return a IRS form 706NR, and the exemption is 60,000 (this may have been indexed for inflation) .... intangibles sich as stocks and bonds are exempted but for US situs real estate no exemption exists

Lane :

"Executors for nonresidents must file an estate tax return, Form 706NA, United States Estate (and Generation-Skipping) Tax Return, Estate of a nonresident not a citizen of the United States, if the fair market value at death of the decedent's U.S.-situated assets exceeds $60,000."

Lane :

Deceased nonresidents who were not American citizens are subject to U.S. estate taxation with respect to their U.S.-situated assets.

Lane :

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.

Lane :

Questions?

Lane :

As to the rest of your assets? No, as a non-resident, your NON US situs property is not an issue and not under US jurisdiction

Customer:

So my assets in Singapore will not be subjected to US estate tax?

Lane :

I should say as a non ( US resident AND NonUS citizen) -- If you were a citizen, your total estate may be subject to estate taxes

Lane :

That's correct

Lane :

no US interest OR jurisdiction unless you were a US citizen

Lane :

By the way here's an EXCELLENT piece on estate and gift taxation for non-residents: http://www.carrmcclellan.com/publications/estate-and-gift-tax-rules-for-nonresident-aliens/

Lane :

and just so you'll have it in one place, here is the official IRS guidance again: http://www.irs.gov/Individuals/International-Taxpayers/Some-Nonresidents-with-U.S.-Assets-Must-File-Estate-Tax-Returns

Lane :

I see that you're typing ... I'll wait

Customer:

is it a better option to have the apartment in Minneapolis registered in an entity like a LLC

Lane :

That IS a good idea for liability protection (business creditors, lawsuits, etc cannot come after your personal assets for liabilities associated with the LLC) ... but from an estate OR income tax perspective an LLC is a pass-through. The LLC does not pay tax, but rather PASSES THROUGH its income and losses to the owner(s)

Customer:

thank you

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4373
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 5 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.

Thanks so much John,

One other thing...

And from an estate tax perspective ALONE no other entity or form of ownership (other than an irrevocable trust, where you give up all control), would affect the estate tax... as it is a tax on your OWNERSHIP of the asset.

Thanks again,

Lane

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Lane
Lane
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Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986