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  1. Yes Phil speaking randomly of the Swiss 🙂
    Note that this amount may be increased by an applicable Estate and Gift Tax Treaty. The
    election available to estates of decedents dying in 2013 …that sounds terrible 🙁 … to be exempt from estate tax is also available to non-U.S. domiciliaries, with a carry-over basis in the decedent’s assets.
    Lol…Phil I suspect there is more room for another blog post next week about this subject.

  2. @bubblebustin,

    1. Yes two Europeans with values in the U.S. brokerage account below $60,000 will not have a U.S. estate tax problem.

    2. ADRs, etc — yes I am ignoring that stuff for the purpose of this blog post. Otherwise I would have to write a book. 🙂

    3. But. Take a random Swiss (for example) brokerage firm. Take a random Swiss (for example) human being with an account at that brokerage firm. The Swiss individual tells the brokerage firm to buy $100,000 of Google stock. Then the Swiss individual dies. The U.S. estate tax applies to the Google stock.

  3. ….direct ownership of U.S. stocks and bonds by nonresidents…. this would apply to any nationality than regardless of expatriation issues. If 2 europeans, husband and wife own US stocks in their US brokerage account it should stay below the value of $60K but Phil you are forgetting that US stocks can be owned via ADRs or through non US financial entities,banks,brokers etc. located outside the US . Would this direct ownership be treated differently since these assets could not be treated as “located” in the US ?

  4. @bubblebustin,

    Yes I have heard of the sailing permit. No, I have never prepared one in my life. 🙂

    At some point the U.S. government will start imposing travel restrictions based on tax matters. They haven’t done so yet, but not for lack of trying.

  5. Phil, in your example …”turn over the money to the couple’s daughter”…. I assume the daughter was a USP ? I further assume that the problem with any estate tax would be nil and void if the daughter would have expatriated as well at the same time or even earlier .

    Yes in this case the daughter was a U.S. person. But she could just as easily have been a non-U.S. person. The critical thing is direct ownership of U.S. stocks and bonds by nonresidents. If the nonresident dies, the assets are subject to U.S. estate tax. The identity of the heir does not matter.

  6. What will become the next FBAR ?
    Phil have you ever heard the phrase “Sailing Permit” ?
    http://www.irs.gov/pub/irs-pdf
    http://www.irs.gov/pub/irs-pdf
    http://www.irs.gov/publication
    Publication 519 (2012), U.S. Tax Guide for Aliens
    irs.gov

    A Certificate of Compliance, or “Sailing Permit,” is a tax form that a foreign (non-US) individual must file with the IRS to demonstrate that he/she has paid all applicable U.S. taxes before departing the US. The purpose of the “sailing permit” is to establish whether a departing foreign national owes any tax dollars to the US government before he leaves the country. There are some exemptions but all green card holders and nonresidents with nonimmigrant status must procure the Certificate of Compliance from the IRS before departing the US (At least 2 weeks prior to departure, the individual owing tax should complete Form 1040-C ; if tax is not owed or there was an overpayment he should complete Form 2063 but of course the IRS cannot provide a refund at the time of departure).

    The FBAR statue is from 1970 ,the requirement for obtaining a sailing permit commenced in 1921. Neither Homeland Security nor the Customs Department, are required currently to check departing foreigners for the sailing permit, despite their strong presence at the border, so at this time the sailing permit lacks any real “bite”.

    What can happen if you don’t have a sailing permit and are stopped at the border? From a tax perspective, simply not having the permit does not mean you owe any tax. However, from a legal standpoint, you can be denied exit. Imo. it will be just a matter of time before not being able to present a sailing permit can cause problems for the foreign national trying to leave the USA.

    If you would like to read about how some US tax professionals obsess currently about all possible ways how to extract a “buck” from foreign nationals please go to :

    http://waysandmeans.house.gov/

  7. Phil, in your example …”turn over the money to the couple’s daughter”…. I assume the daughter was a USP ? I further assume that the problem with any estate tax would be nil and void if the daughter would have expatriated as well at the same time or even earlier .

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Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.