Estate, gift tax on nonresident noncitizens


Step up in basis for nonresident’s assets in irrevocable trust

What “basis” is One of the continuing mysteries of life involves the concept of “basis”. Think of basis as your acquisition cost. This is essential in calculating your capital gain tax after selling an asset. Capital gain is the difference between the sale price and your acquisition cost. The higher your basis — or acquisition […]

Basis step-up on assets inherited from nonresident

Yes, I’m back from more than a week off the grid in the Quetico Provincial Park, paddling and portaging. This was a Boy Scout trip with my son’s troop, starting from the Charles L. Sommers Wilderness Canoe Base. Who knew that going canoeing involves carrying extremely heavy stuff over steep, treacherous portages in the rain? […]

Property you acquired before coming to the USA

This is a quick little blog post to answer a recurring question for many people out there.  It came up in the course of some work I am doing right now. Situation You are a nonresident of the United States.  Thirty years ago you bought a piece of land in your home country for US$10,000. […]

List of U.S. estate tax treaties

For the people in my San Francisco CalCPA course yesterday. . . here is the list of estate and gift tax treaties from the IRS website.  

Estate tax sunset in 2010 applies to nonresidents

I received an email inquiry from a CPA friend about this, so I thought I would share it generally. Question Does the 2010 repeal of the estate tax apply to nonresidents of the United States? Answer Yes.  The repeal applies to residents and nonresidents alike. Background The estate tax disappeared on December 31, 2009.  It […]

Why nonresident decedents get step-up basis at death

For some of you this post is going to be a bit of inside baseball. Sorry. If you’re not a tax propellerhead person, here’s the bottom line: your parents live outside the United States, you inherit foreign real estate from them? You inherit the real estate without estate tax, and when you sell the U. […]

A rare reported U.S. case on trust protectors

Trust protectors are a rare breed in U.S. trusts. Our firm knows about using protectors because we do so much work with offshore (i.e., non-U.S.) trusts, where use of a protector is common. Case law from U.S. courts defining a protector’s rights and responsibilities are even rarer. The Missouri Court of Appeals has a recent […]

Foreign gift reporting on Form 3520 is next

Besides the FBAR (the Report of Foreign Bank and Financial Accounts, Form TD F 90-22.1, warning it is a PDF) the single most “oops I forgot” form that I see for regular human being clients is Form 3520. Gifts received from nonresidents aren’t reported properly. Or at all. Something tells me (warning! PDF) that the […]

Gifts of cash by nonresidents are surprisingly taxable

The United States has a gift tax: if you give something to someone, you have to pay the U.S. government for the privilege. Yes there are a ton of exceptions and weird rules. This is tax law after all. But you’d be surprised who gets tangled up in the gift tax law. Consider this one. […]

Exercise a limited power of appointment, make a gift

This is a little bit of inside baseball for the pointy-headed trust aficionados among you. We draft tons of trusts. Domestic trusts. Foreign trusts. Revocable and irrevocable. There is plenty of stuff in a trust that is non-obvious, both in the trust language and the tax implications of what you do after the trust is […]