The $60,000 Question: US Estate Tax for Wealthy Non-Residents

A non-resident who is not a US citizen has a US estate tax filing threshold of $60,000 in US-situated assets, and a maximum unified credit that the IRS puts at $13,000. Not the multi-million figure that applies to Americans. Sixty thousand dollars, and the estate files Form 706-NA above it.

Most families discover this after a death rather than before one, which is the worst possible moment, because by then the structure that would have solved it can no longer be built. The number is small enough that a single apartment or a single brokerage account clears it.

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01What Actually Counts as a US Asset Here?

The rule that catches people is about company shares, and the IRS states it without any wiggle room: no matter where stock certificates are physically located, stock of corporations organized in or under US law is property located in the United States. Where you keep the certificate is irrelevant. Where the company was incorporated is everything.

So a family in Bogota or Madrid holding shares in a Delaware corporation holds a US-situated asset, even if nobody in the family has set foot in the United States. Debt obligations follow a similar logic: they are generally US property if the debtor is a US person, a domestic partnership or corporation, or the US government itself.

02Does My US Bank Account Count Toward It?

Usually no, and this surprises people who assume the bank account is the exposed thing. A deposit with a US bank, or with a US banking branch of a foreign corporation, is treated as located outside the United States when it is not effectively connected with conducting a trade or business in the country.

That produces an inversion worth sitting with. The account you think of as your American money is generally outside the net. The shares in the company you set up are inside it. People plan around the wrong one constantly.

03What About an LLC Instead of a Corporation?

This is where an honest answer is better than a confident one. The rule the IRS writes down is about stock of corporations, and an LLC membership interest is not stock. The treatment of an LLC interest for estate tax situs is genuinely unsettled and depends on facts including how the entity is classified for tax purposes.

We will not tell you it is safe, because nobody can tell you that from a general rule. What we will say is that if your US holding is an LLC rather than a corporation, that difference is a question for an estate adviser rather than an assumption to rest on.

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04What Should a Family Do Before It Matters?

Know your number first. Add up what you hold that is US-situated under the rules above, not what you hold in the United States in a general sense. For many families the total is either comfortably under the threshold or dramatically over it, and knowing which one changes everything about what comes next.

Then decide whether the holding structure is the one you would choose knowing this. Structures that work well for operating a business are not automatically the ones that pass cleanly to a next generation, and the two objectives are often solved by different entities in different places.

If you would like your own holdings mapped against these rules rather than a general explanation, start here and we will look at it with you and with an estate specialist where the answer requires one.