The $60,000 exemption for nonresidents
A US citizen or resident can pass roughly $15 million (2026) free of US estate tax. A nonresident alien gets only $60,000 of exemption against their US-situated assets β and that figure has barely moved in decades.
So a foreign investor who buys a $1.5M US apartment and dies could face US estate tax on roughly $1.44M of value, at rates climbing to 40% β a bill of several hundred thousand dollars, payable before the heirs can take the property.
US real estate is the classic trap because it is always US-situs. Holding it directly, in your own name, maximizes the exposure.
Gift tax vs estate tax β the situs twist
This is the single most useful thing to understand as an NRA:
- US real estate β caught by BOTH gift and estate tax.
- US corporation stock β exempt from NRA gift tax, but SUBJECT to estate tax. So gifting US shares during life can avoid the tax that would hit at death.
- US bank deposits β generally outside estate tax for NRAs (special rule).
Because of this asymmetry, a lifetime gift of US intangibles (like shares) by an NRA falls outside US gift tax (IRC Β§2501(a)(2)), while a gift of US real estate does not. There's no NRA lifetime exemption, so only the annual exclusion ($19,000; $194,000 to a non-citizen spouse) shelters gifts.
Planning levers (with a professional)
Ways NRAs with US assets reduce exposure include:
- Foreign holding company β owning US real estate through a non-US corporation can convert US-situs real estate into non-situs foreign stock for estate-tax purposes (with income-tax trade-offs).
- Life insurance β proceeds on an NRA's life are generally not US-situs, providing liquidity to pay any tax.
- QDOT β a Qualified Domestic Trust can defer estate tax on assets passing to a non-citizen spouse.
- Treaty relief β if your country has a US estate-tax treaty, the exemption can be far higher than $60,000.
Each carries trade-offs across income tax, control and reporting. This tool only sizes the exposure β the structuring needs a cross-border specialist.
How to file: forms, deadlines & the Transfer Certificate (2026)
There is no government filing fee, but the deadlines are strict and the Transfer Certificate is the real bottleneck β US custodians avoid liability only by demanding it before they release the assets (26 CFR 20.6325-1(a)), and for the affidavit route the IRS states 12 to 18 months.
Key forms & deadlines
| Form / Step | Deadline |
|---|---|
| Form 706-NA (estate, > $60k US-situs) | 9 months after death |
| Form 4768 (6-month extension) | By the 706-NA due date |
| Form 709-NA (gift, > annual exclusion) | 15 April (year after) |
| Transfer Certificate (Form 5173), affidavit route | IRS: 12β18 months after complete documents |
No IRS filing fee applies. State estate/inheritance taxes (e.g. New York, Washington, Massachusetts) may apply separately under each state's own rules.
Why the Transfer Certificate matters
US banks, brokers and transfer agents avoid liability for the estate tax only by demanding a Transfer Certificate before they release a nonresident decedent's assets (26 CFR 20.6325-1(a)). It is not required when US-situs assets are $60,000 or less (20.6325-1(b)), or for property administered by an executor appointed and acting in the United States (IRS). Where Form 706-NA is required, the IRS issues the certificate once the tax is fully discharged, which can follow the 9-month filing deadline and any examination; for estates below the filing threshold, the IRS states its processing time for the affidavit and supporting documents is 12 to 18 months from receipt of all documents.
Documents to prepare
- Certified death certificate and proof of the executor's authority.
- Date-of-death appraisals for US real estate and broker statements for US securities.
- Records of prior US gifts and any gift-tax credit used.
- A treaty position statement with domicile evidence, if relying on a treaty.
Frequently asked questions
Q. Does my heir pay US tax on receiving the gift/inheritance?
A. No β US transfer tax falls on the donor/estate, not the recipient. (A US-person recipient may have a Form 3520 reporting duty for large foreign gifts, but not tax.)
Q. I rent out a US property β same rules?
A. Rental income is a separate income-tax matter (with FIRPTA withholding on a sale). The estate/gift exposure here is about transferring the asset itself.
Q. What if the US and my country have a treaty?
A. Estate-tax treaties (the US has them with a limited set of countries) can replace the $60,000 exemption with a pro-rated share of the much larger exemption, or change situs rules. Always check your specific treaty.
NRA estate/gift tax checklist (save your progress)
Tick each item as you prepare it. Progress is saved in this browser β nothing is uploaded. This is a preparation aid, not tax advice.
Sources and official references: IRS β Gift taxes for nonresidents not citizens of the US; IRS — Estate taxes for nonresidents not citizens of the US; IRS — Transfer certificate filing requirements (nonresidents not citizens); 26 CFR 20.6325-1; 26 U.S.C. §2001(c) (rate schedule); 26 U.S.C. §2102(b) ($13,000 unified credit); IRS β Instructions for Form 706-NA (estate tax, 9-month deadline, Form 4768 extension) and Form 709-NA (gift tax). 2026 figures β NRA estate exemption $60,000 (fixed), annual gift exclusion $19,000, non-citizen-spouse exclusion $194,000; rates 18β40%. This is an independent self-assessment tool, not tax or legal advice; US-situs determination, treaties and structuring are highly fact-specific. Consult a licensed cross-border estate-tax attorney. See also our exit tax, SPT and green card travel tools.