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CFEPro789
CFEPro789, Accountant
Category: Tax
Satisfied Customers: 538
Experience:  Former IRS Agent, Master of Accountancy, Tax Return Preparer
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I am a divorced resident alien. My two children are also resident

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I am a divorced resident alien. My two children are also resident aliens, but both are married to American citizens. My ex-wife is also a resident alien. Should I die now, there would be an estate of about $350,000. Would some of that money be lost to federal taxes and if so, about how much? Would the taxes be different if one or all four of us became citizens?

jgdarragh2285 :

Hi my name is XXXXX XXXXX I will be helping you today with your tax question.

jgdarragh2285 :

Currently you would not lose any of this money to federal taxes. For 2013 the estate only becomes taxable if the total of your gross assets and lifetime gifts over the annual exempt amount is over $5,250,000. This amount does change from year to year, but with $350,000 you will be safe. You will not owe any tax on this estate

jgdarragh2285 :

The fact that you are not a US Citizen will not affect this

Customer:

Perhaps I should be clear that I am referring to what may be called Inheritance tax, or Death tax or transfer tax. It was my belief that a non citizen's estate does not qualify for an exemption over $100,000.

Customer:

There was a lot of discussion in resident alien circles regarding this, and the need for us to become citizens for that one reason.

jgdarragh2285 :

For Non-U.S. Domiciliaries the exemption is $100,000 but you would be considered a US Domiciliary because you are a resident alien, not a non resident alien

jgdarragh2285 :

And I just researched and the exemption is now $60,000, not $100k.

Customer:

Thanks, XXXXX XXXXX is not what "just answer" showed before I went further with you. It states that the "marital deduction of sec. 2056" does not apply to a non citizen.

jgdarragh2285 :

Here is right from the IRS, nonresidents who were not us citizens have that lower deduction, but not resident aliens

jgdarragh2285 :

http://www.irs.gov/Individuals/International-Taxpayers/Some-Nonresidents-with-U.S.-Assets-Must-File-Estate-Tax-Returns

Customer:

And that "the difference between the amount being transferred and $100,000 will be subjected to the estate tax, …"

Customer:

I must leave to pick up a child. Thank you for the advice. I will rate you well, even though I am not sure that this matter is resolved to my satisfaction.

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