Estate Planning for Non US Citizens

There are many reasons why a non-U.S. citizen may need the help of a tax attorney in California .Persons who are not United States citizens, such as nonresident aliens and greencard holders, face a challenging United States estate tax planning environment when they invest in United States assets. Instead of the $3,500,000 exemption amount (applicable in 2009) to which United States citizens and permanent residents are entitled, a nonresident alien is entitled to an exemption of only $60,000 for their United States property. Permanent residents of the United States, while entitled to the entire $3,500,000 (applicable in 2009) estate tax exemption for the United States estate tax, are subject to United States estate tax on their worldwide assets, including assets held in the home country. Both nonresident aliens and greencard holders may also be subject to estate tax in their country of citizenship. However, a qualified California tax lawyer can help.

The United States has entered into tax treaties with a select number of countries – namely:

Country
Year First Signed
Australia
1982
Austria
1996
Barbados
1984
Belgium
1970
Canada
1980
China
1984
Cyprus
1984
Czech Republic
1993
Denmark
1948
Egypt
1980
Estonia
1998
Finland
1989
France
1994
Germany
1989
Greece
1950
Hungary
1979
Iceland
1975
India
1989
Indonesia
1988
Ireland
1997
Israel
1975
Italy
1984
Jamaica
1980
Japan
1971
Kazakhstan
1993
Korea
1976
Latvia
1998
Country
Year First Signed
Lithuania
1998
Luxembourg
1962
Mexico
1992
Morocco
1977
Netherlands
1992
New Zealand
1982
Norway
1971
Pakistan
1957
Philippines
1976
Poland
1974
Portugal
1994
Romania
1973
Russia
1992
Slovak Republic
1993
Slovenia
1999
South Africa
1997
Spain
1990
Sweden
1994
Switzerland
1996
Thailand
1996
Trinidad
1970
Tunisia
1985
Turkey
1996
Ukraine
1994
United Kingdom
1975
Venezuela
1999

A tax relief attorney understands that these treaties, in general, allow a citizen of one of the treaty countries who owns property to avoid the possibility of both countries taxing the same asset at the time of death. As far as the United States estate tax is concerned, a treaty might reduce or eliminate such tax on the United States property of a nonresident alien.

Proper planning with the help of a tax relief attorney can greatly reduce the incidence of the United States estate tax for nonresident aliens and permanent residents, by taking advantage of certain structures and planning techniques, such as:

  • Pre Immigration or Migration Planning
  • Acquiring U.S. Real Estate whether outright cash purchase or debt-financing
  • Offshore Trust Planning and Use Of Other Offshore Entities

The probate lawyers at the Law Offices of Jeffrey B. Kahn, P.C. have experience representing nonresident aliens and greencard holders with estate planning, particularly individuals from the “treaty” countries.

To learn more about tax planning for nonresident aliens or to contact an Orange County tax attorney, please call 866.494.6829 or send us an email.

IRS 2017 Tax Deductions

IRS Announces 2017 Inflation Adjusted Tax Benefits

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It is hard to believe that we are just two months away from the year of 2016 and as always towards the end of each calendar year the IRS announces next year’s annual inflation adjustments. You can check for more than 50 tax provisions, including the tax rate schedules, and other tax changes for tax year 2017 in Revenue Procedure 2016-55. The tax year 2017 adjustments generally are used on tax returns filed in 2018.