Form 706-NA: A Complete Guide for Estates of Nonresident Non-Citizens (2022)
When a person who was neither a U.S. citizen nor a U.S. resident passes away but owns property in the United States, their estate may need to file Form 706-NA—the United States Estate (and Generation-Skipping Transfer) Tax Return for nonresidents not citizens. This guide breaks down everything executors and estate administrators need to know about this specialized tax form in plain language.
What Form 706-NA Is For
Form 706-NA serves two main purposes for estates of people who were not U.S. citizens or residents at the time of death but owned U.S. property.
Purpose 1: Calculating Federal Estate Tax
It calculates the federal estate tax owed on the transfer of U.S.-situated assets. Unlike income tax, which taxes what you earn, estate tax is imposed on the transfer of property when someone dies—specifically the value of their taxable estate rather than on individual inheritances.
Purpose 2: Computing the Generation-Skipping Transfer (GST) Tax
Form 706-NA also computes the Generation-Skipping Transfer (GST) tax, which applies when property passes to someone who is two or more generations younger than the decedent (such as a grandchild). The GST tax prevents wealthy families from avoiding estate taxes by skipping a generation. However, for Form 706-NA purposes, this tax only applies to U.S.-situated property included in the gross estate.
Key Distinction from Form 706
The key distinction from the regular Form 706 (used for U.S. citizens and residents) is that Form 706-NA only covers property physically located in or connected to the United States.
U.S.-Situated Property Includes:
- Real estate physically located in the U.S.
- Tangible personal property (like artwork, jewelry, or vehicles) within U.S. borders
- Stock in U.S. corporations
Generally Excluded:
- Bank deposits
- Portfolio debt obligations
- Certain other assets under tax treaties
When You’d Use Form 706-NA
Filing Requirement
The executor must file Form 706-NA if the total value of the decedent's U.S.-situated assets on the date of death, combined with any gift tax specific exemption and adjusted taxable gifts made after December 31, 1976, exceeds $60,000. This threshold does not change yearly.
Normal Deadline
The return must be filed within 9 months of the date of death. Estate taxes are also due within this same period.
Extensions
You can request an automatic 6-month extension by filing Form 4768. Executors outside the U.S. may qualify for additional time. Note that extensions to file do not extend the time to pay.
Late Filing
If you miss the deadline and have reasonable cause (such as serious illness or natural disaster), the IRS may waive penalties under Section 6651. The burden of proof lies with the estate.
Amended Returns
If you discover errors, file an amended Form 706-NA marked "Supplemental Information" at the top of page 1. Include copies of pages 1–4 from your original return and mail to:
IRS Center in Florence, KY
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915
Key Rules and Thresholds for 2022
Filing Threshold
- $60,000 in U.S.-situated assets
- Fixed amount, not indexed for inflation
Unified Credit
- $13,000 credit, exempting $60,000 of assets from tax
- Much lower than the $12.06 million exemption for U.S. citizens/residents in 2022
Tax Rates
- Same progressive rate schedule as Form 706
- Ranges from 18% to 40%
Treaty Benefits
Estates from treaty countries may receive increased credits based on the ratio of U.S. assets to worldwide assets. Attach a treaty-based filing statement to your return.
What Counts as U.S.-Situated Property
Includes:
- Real estate and tangible property in the U.S.
- Stock in U.S. corporations
Excludes:
- Certain bank deposits and portfolio debt obligations
- Artwork on loan for exhibition
Generation-Skipping Transfer Tax
Applies only to U.S.-situated property and follows the same rate structure as the regular GST tax.
Step-by-Step Filing Process (High Level)
Step 1: Determine if Filing Is Required
Calculate the value of all U.S.-situated assets. If the total exceeds $60,000, filing is required.
Step 2: Gather Required Documents
Collect:
- Death certificate
- Certified copy of the will
- Property appraisals and financial statements
- English translations for foreign documents
Step 3: Determine Asset Values
Value all U.S. property at fair market value as of the date of death.
Step 4: Complete Form 706-NA
Fill out:
- Part I: Decedent information
- Part II: Executor information
- Part III: Estate questions
- Parts IV & V: U.S. assets
Step 5: Attach Required Schedules
Include relevant schedules for deductions, credits, and GST tax (Schedules R or R-1).
Step 6: Calculate Tax and Credits
Use Part VI to compute tentative tax, apply credits, and determine the final estate tax due.
Step 7: Sign and File
Mail the completed form and payment to:
Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999
Step 8: Pay Any Tax Due
Payments may be made by check (payable to United States Treasury) or electronically through EFTPS.
Common Mistakes and How to Avoid Them
Mistake #1: Assuming the U.S. Citizen Threshold Applies
Solution: Always use the $60,000 threshold for Form 706-NA.
Mistake #2: Missing Required Attachments
Solution: Include all required items—certified will, death certificate, translations, and schedules.
Mistake #3: Including Non-U.S. Property
Solution: Only report U.S.-situated assets to avoid inflated valuations.
Mistake #4: Valuation Errors
Solution: Obtain professional appraisals and maintain documentation to avoid penalties.
Mistake #5: Ignoring Treaty Benefits
Solution: Research applicable estate tax treaties and attach supporting documentation.
Mistake #6: Missing the Form 8971 Deadline
Solution: File Form 8971 within 30 days of filing Form 706-NA.
Mistake #7: Poor Communication Among Executors
Solution: List all co-executors, communicate regularly, and review filings together.
What Happens After You File
Immediate Post-Filing (Within 30 Days)
File Form 8971 with the IRS and provide copies to beneficiaries to ensure consistent basis reporting.
Processing Period (Months 1–9)
Expect correspondence about:
- Math or valuation errors
- Missing schedules
- Clarifications
Estate Tax Closing Letter (9+ Months)
Request an Estate Tax Closing Letter (ETCL) through Pay.gov after 9 months.
As of May 21, 2025, the fee is $56.
Alternative: Account Transcript
You can instead request a free account transcript showing acceptance or completion of review.
Possible IRS Examination
Audits often focus on valuation, reporting completeness, deductions, and treaty claims.
Transfer Certificates
For property transfers or sales, fax a copy of the return to:
- 855-201-8011 (U.S.)
- 304-707-9970 (International)
FAQs
Q1: My relative was not a U.S. citizen or resident but owned $80,000 in U.S. stocks. Do I need to file?
Yes. Since the value exceeds $60,000, you must file Form 706-NA. Stock in U.S. corporations is considered U.S.-situated property.
Q2: Can I reduce the estate tax using foreign tax credits?
Potentially, yes. Attach Schedule P (Form 706) and documentation of foreign taxes paid. The credit cannot exceed the U.S. tax on the same property.
Q3: What if new U.S. assets are discovered after filing?
File an amended Form 706-NA labeled “Supplemental Information” and mail to Florence, KY. Pay any additional tax immediately.
Q4: Are U.S. bank accounts included in the estate?
Generally, no—unless connected to a U.S. trade or business. Most deposits are excluded under Section 2105(b).
Q5: How do I claim treaty benefits?
Confirm the existence of a treaty via IRS Publication 901, complete the treaty worksheet, and attach supporting documents.
Q6: What if the estate cannot pay by the deadline?
Request an extension to pay using Form 4768 or elect installment payments under Section 6166. Interest still accrues.
Q7: Can an executor living outside the U.S. file Form 706-NA?
Yes. You must appoint a U.S.-based agent and may need additional documentation. Consider professional help for international cases.
Additional Resources
Disclaimer:
This guide is for informational purposes only and does not constitute legal or tax advice. Estate tax law is complex—consult a qualified tax professional or estate attorney for personalized guidance.
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