Form 706-NA (2018): Nonresident Estate Tax Checklist
This checklist serves as a practical reference for preparing Form 706-NA to report U.S. estate tax and, when applicable, generation-skipping transfer tax for a decedent who was not domiciled in the United States. It applies to non-resident aliens whose gross estate includes
U.S. property that is subject to federal estate taxes and related filing requirements.
Form 706-NA focuses on U.S. assets, allowable deductions, and valuation methods required to complete a United States estate tax return accurately. When treaty relief is claimed, additional computations referencing worldwide estate values may be necessary under death tax treaties and treasury regulations.
Confirm the Decedent’s Status and Identity
Documentation
Before valuation work begins, confirm the decedent qualifies as a non-resident of the U.S. for estate tax purposes under domicile standards, not immigration classifications such as a green card or immigrant visa status. This determination relies on facts surrounding U.S. citizenship, substantial presence test results, and long-term community affiliations.
Identity documentation should include proof of non-U.S. citizenship, evidence of domicile, and, when available, a death certificate. Supporting records may also include a driver's license,
Social Security number documentation for estate representatives, and executor authority papers.
Inventory U.S.-Situated Gross Estate Assets
Identify all U.S. situs property includible in the gross estate under the Internal Revenue Code, including U.S. real estate, tangible personal property, and specific U.S. securities. Asset classification must distinguish includible U.S. assets from property treated as foreign situs despite U.S. connections.
Each asset requires ownership evidence and fair market value documentation as of the estate tax inclusion period. Liens, secured debt, and residential property encumbrances should be documented because they directly affect gross estate assets and deductible amounts.
Determine Whether Form 706-NA Is Required
Form 706-NA filing requirements are generally triggered when the value of U.S. assets, combined with adjusted taxable gifts reported under gift tax rules, exceeds the $60,000 filing threshold. This threshold applies regardless of estate planning strategies, GST exemption expectations, or anticipated tax credits.
The higher exclusion amounts available to U.S. citizens under Form 706 do not apply to non-resident aliens. Treaty provisions may modify tax liability, but do not eliminate the obligation to meet timely filing requirements.
Select Valuation Methods and Valuation Date
Fair market value is generally determined as of the date of death unless an alternate valuation election is available and properly applied. Valuation methods must remain consistent across all schedules to avoid discrepancies during Internal Revenue Service review.
Supporting records typically include appraisals, brokerage statements, and valuation summaries for closely held interests. Consistent valuation practices reduce regulatory complexity and support accurate estate management.
Ten-Step Filing Checklist for Form 706-NA
Step 1: Confirm nonresident and noncitizen classification
Confirm the decedent is treated as a non-resident alien for U.S. estate tax purposes based on domicile facts, not green card test results or immigration status. Retain supporting records showing U.S. citizenship absence and nonresident intent.
Step 2: Identify U.S. situs property
Identify all U.S. situs property includible in the gross estate, including U.S. real estate, tangible personal property, and qualifying U.S. securities. Confirm assets connected to U.S. trade or business are correctly classified.
Step 3: Apply the filing threshold rule
Determine whether the combined value of U.S. assets and adjusted taxable gifts exceeds the
$60,000 filing threshold. Consider prior Form 709 filings and taxable distribution history when evaluating filing requirements.
Step 4: Assemble valuation support
Compile fair market value documentation as of the date of death for each U.S. asset. Ensure valuation methods are consistent across schedules and supported by reliable third-party evidence.
Step 5: Complete asset schedules
Populate Schedule A and other applicable schedules using accurate ownership and valuation data. Reconcile all schedule totals to the gross estate reported on Form 706-NA.
Step 6: Compute allowable deductions
Identify deductible expenses connected to U.S. assets, including administration expenses and secured debt. Allocate deductions carefully when proration is required under non-resident alien rules.
Step 7: Evaluate marital deduction eligibility
Determine whether transfers qualify for a marital deduction despite non-U.S. citizenship, including Qualified Domestic Trust considerations. Confirm that trust instruments support the claimed deduction under Treasury Regulations.
Step 8: Prepare treaty-based computations if applicable
Compile worldwide estate values when claiming treaty relief under applicable Death Tax
Treaties. Maintain clear workpapers explaining ratios and treaty-based tax credits.
Step 9: Complete estate and GST tax calculations
Compute estate tax based on the taxable U.S. estate and allowable deductions. If applicable, report generation-skipping transfer tax related to a generation-skipping trust using required schedules.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Assemble, sign, and file the return
Review the return for accuracy, obtain required signatures, and retain complete copies for estate records. Confirm the correct filing address and filing deadline using current Internal Revenue
Service guidance.
Final Quality-Control Review
Confirm U.S. assets are appropriately included and excluded property is omitted based on situs rules. Verify deductions, treaty claims, and transfer tax computations reconcile across schedules and the primary return.
Ensure the estate tax return is signed, attachments are complete, and the timely filing standards are met. A thorough review supports compliance and reduces delays in receiving an estate tax closing letter or IRS transfer certificate.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
