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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15601
Experience:  15years with H & R Block. Divisional leader, Instructor
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Can you answer queries re the US tax implications of the

Customer Question

Can you answer queries re the US tax implications of the following scenario:
1.0 The writer is a 'non-resident alien' (NRA) in US terms, and has no exposure to US tax net.
2.0 The NRA is considering establishing an irrevocable offshore (Bahmanian) trust
3.0 The assets of the Trust may include ownership of closely companies, and real property.
4.0 The NRA would like to know if your area of expertise includes advising on the tax implications - including tax efficiency/advisabilit etc of including in their Last Will and Testamant a beneficiary who is a US citizen and who lives and files tax returns in the US.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


A non resident alien (NRA) of the US would have no tax obligation to the US unless they held US situs property.

A US beneficiary of a NRA is not taxed unless the estate of the NRA involves US property.

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.

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.

There could be a tax treaty that would limit what could be included in the US estate of the NRA.

The US citizen would have a reporting requirement depending on the value of the inherited items no matter if the estate is free of US situs.