What Form 706-NA Is For
Form 706-NA is used to report the United States estate and generation-skipping transfer taxes for a decedent’s estate when the deceased was not a citizen or resident of the United States. This estate tax form helps calculate estate tax liabilities on assets located in the U.S., such as tangible personal property, real estate within the country, or shares in U.S. corporations. The Internal Revenue Service uses this information for estate tax purposes, including determining any estate tax owed.
When You’d Use Form 706-NA (2022)
You must file Form 706-NA if the decedent’s gross estate located in the United States exceeds the $60,000 filing threshold. This includes assets such as U.S. real estate, tangible property, or stock in a U.S. company. Executors should file the estate tax return within nine months after the decedent’s date of death. If more time is needed, a six-month extension can be requested by submitting Form 4768 to the Internal Revenue Service. Late or amended estate tax returns may still be accepted if reasonable cause for delay is shown under applicable tax laws.
Key Rules or Details for 2022
- Filing Threshold: Estates of individuals who were not U.S. citizens must file if the decedent’s gross estate located in the United States exceeds $60,000, including adjusted taxable gifts.
- Unified Credit Exemption: Nonresident estates receive a $13,000 unified credit exemption, which equals exempting $60,000 in value. This is significantly lower than the exemption available to U.S. residents.
- Tax Rates: The estate tax is progressive, with rates ranging from 18% to 40%. Executors must calculate tax liabilities based on the taxable estate after applying deductions and exemptions.
- Treaty Benefits: Estates may be eligible to claim benefits under an applicable death tax treaty, such as the Canada income tax treaty, which can reduce the estate tax owed or increase credits.
- U.S.-Situated Property: Assets in the United States include tangible personal property, real estate located in the U.S., and shares in domestic corporations. Bank deposits and certain debt obligations are often excluded.
- Generation-Skipping Transfer: The generation-skipping transfer tax applies only to such property within the decedent’s estate that passes to beneficiaries two or more generations below the decedent.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Determine If You Need to File Form 706-NA
Identify all assets situated within the United States, such as physical personal property or real estate located in the country. If their total value exceeds $60,000, you must file Form 706-NA to comply with estate taxation requirements.
Step 2: Gather Documents and Determine Estate Value
Collect the decedent’s will, death certificate, appraisals of real estate, and financial records. Include prior transfers, adjusted taxable gifts, and administration expenses related to the decedent’s gross estate for accurate valuation.
Step 3: Calculate Fair Market Value and Compute Estate Tax
Determine the fair market value of each asset at the death value date. Executors must compute estate tax using IRS valuation standards, considering the marital deduction or a qualified domestic trust if a surviving spouse is involved.
Step 4: Complete and File Form 706-NA
Fill out all sections of the tax form, including information about the decedent’s estate, gross estate, and deductions such as debts and administration expenses. Use private delivery services if needed, and send the estate tax return paperwork to the following address: Department of the Treasury, Internal Revenue Service Center, Kansas City, MO 64999.
Step 5: Pay the Net Estate Tax Due
Calculate tax liabilities after deductions and credits. Payments can be made by check or electronically. Estate tax return preparers should ensure all information is correct to avoid willful or reckless conduct penalties.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Incorrect Threshold Application: Many executors apply the U.S. citizen threshold rather than the $60,000 filing threshold. To avoid this, verify eligibility before preparing the estate tax return.
- Including Non-U.S. Property: Some filers mistakenly list foreign investment assets as part of their tax return. Avoid this by reporting only the gross estate located within the U.S. for estate tax purposes.
- Missing Attachments: Failing to include the will, death certificate, or translations delays processing. Use a checklist before submission to the Internal Revenue Service.
- Misstating Asset Values: Undervaluing assets may increase audit risk. Prevent this by obtaining professional appraisals that accurately reflect fair market value and estate value.
- Ignoring Treaty Benefits: Failing to claim estate tax treaties, such as the Canada income tax treaty, can result in an overpayment. Review applicable treaty provisions before filing.
- Missing Consistent Basis Reporting: Executors must provide Form 8971 to beneficiaries within 30 days of filing. To avoid penalties, calendar this requirement alongside filing deadlines.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File Form 706-NA (2022)
After submitting the estate tax return, the Internal Revenue Service reviews and processes it within several months. During this time, the IRS may request clarification or additional documents regarding certain assets or administration expenses. Estates can request an estate tax closing letter through Pay.gov to confirm that the case is closed. As of 2025, the fee for an estate tax closing letter is $56. Executors may also request free account transcripts through registered tax professionals. If audits arise, the IRS may review valuations, deductions, and treaty claims to confirm accuracy.
FAQs
Who must file Form 706-NA for estate tax purposes?
Any executor representing a decedent’s estate that includes more than $60,000 in U.S.-situated assets must file Form 706-NA with the Internal Revenue Service.
What is considered U.S.-situated property under Form 706-NA?
U.S.-situated property includes tangible personal property, real estate located in the United States, and shares in U.S. corporations. It excludes bank deposits and most debt obligations.
How does a death tax treaty affect estate tax liabilities?
An applicable treaty, such as the Canada income tax treaty, can increase credits or reduce estate tax owed. Always attach documentation explaining the treaty position.
How do I request an estate tax closing letter?
Executors may request an estate tax closing letter through Pay.gov after nine months. This document verifies that the Internal Revenue Service has accepted the estate tax return.
Can I claim an estate tax exemption or unified credit?
Yes, estates can apply a unified credit exemption of $13,000, shielding $60,000 in property value from the U.S. estate tax.
Does the estate tax return include generation-skipping transfers?
Yes, Form 706-NA requires reporting any generation-skipping transfer involving property in the United States, using Schedules R or R-1 from Form 706.
Can debt obligations or prior transfers reduce the estate’s tax liability?
Yes, executors may deduct valid debt obligations, administration expenses, and prior transfers when they calculate tax liabilities to reduce the net estate tax due.
For more resources on filing or understanding prior-year IRS forms, visit our guide on Estate and Gift Tax Reporting.
