Form 706-NA (2020): Nonresident Estate Tax Checklist
Scope and purpose (what this checklist is for)
This reference guide explains how to prepare Form 706-NA to report federal estate taxes for a decedent who was a non-resident of the United States and not a U.S. citizen at death. It applies to estates with U.S. subjects to transfer taxes under the Internal Revenue Code and related
Treasury Regulations.
The checklist focuses on identifying gross estate assets, determining filing requirements, and completing the estate tax return accurately, including deductions, valuations, and administrative steps required by the Internal Revenue Service for 2020 filings.
Quick orientation: What gets reported
A. U.S.-situated assets define the estate tax base
For nonresident alien decedents, federal estate taxes generally apply only to property situated in the United States, including tangible personal property and certain intangible assets classified as U.S. situs. Correct situs classification determines tax liability, filing threshold exposure, and whether a Form 706-NA filing is required.
Worldwide assets may still be relevant for allocation limits, treaty positions, or deduction calculations under Death Tax Treaties. Accurate classification supports defensible estate planning and compliance outcomes.
B. Avoid assumptions about asset location
U.S. situs property includes more than residential property or physical assets located domestically, as U.S. securities and other interests may fall within the estate tax regime. Each asset must be analyzed individually using statutory rules rather than account location or custodian assumptions.
Careful review prevents misreporting, supports valuation methods, and reduces disputes during
IRS review or issuance of an estate tax closing letter.
Ten-step checklist (2020 filing workflow)
Step 1: Confirm NRNC status and filing requirements
Confirm the decedent was neither a U.S. citizen nor domiciled in the United States at death, applying the green card test, substantial presence test, and domicile factors. Determine whether assets exceed the filing threshold requiring a Form 706-NA estate tax return.
Retain documentation supporting nonresident alien status, including immigration records, driver’s license history, community affiliations, and voting registration, since filing requirements depend on factual residence and citizenship determinations.
Step 2: Assemble foundational documents and executor authority
Gather the death certificate, executor appointment documents, and trust instruments affecting
U.S. assets, ensuring English translations are available where required by the Internal Revenue
Service. Confirm authority to act for the estate and identify responsible parties early.
Collect supporting records for citizenship, green card status, or immigrant visa history, focusing on evidence necessary to support estate tax positions rather than producing unnecessary documentation.
Step 3: Inventory and classify U.S. situs assets
Prepare a comprehensive inventory, separating U.S. situs property from non-U.S. assets, documenting ownership, location, valuation methods, and any debt obligations associated with includible assets. Correct classification of gross estate assets drives estate tax exposure and reporting accuracy.
Include residential property, U.S. securities, tangible personal property, and trust corpus interests when applicable, while excluding assets treated as non-U.S. situs under the Internal
Revenue Code.
Step 4: Establish fair market value at death
Determine fair market value for each U.S. situs asset using defensible valuation methods, such as appraisals, brokerage statements, or professional valuation reports dated at death. Retain documentation showing methodology, assumptions, and valuation dates.
Accurate valuations support tax liability calculations and charitable deduction claims, and reduce challenges during IRS examinations or requests for an account transcript.
Step 5: Determine Form 706-NA filing obligation
Evaluate filing requirements using NRNC-specific rules rather than resident thresholds, confirming whether the estate must file based on U.S. situs asset values and applicable exemptions. Consider death tax treaties and recent developments affecting filing thresholds or credits.
Document analysis supporting whether a return is required, as incorrect assumptions may delay issuance of an IRS transfer certificate or estate tax closing letter.
Step 6: Complete applicable asset schedules
Prepare Form 706-NA schedules corresponding to includible assets, such as real estate, stocks, bonds, cash, or insurance, completing only the schedules required by the estate’s fact pattern. Avoid assuming all schedules apply universally.
Ensure that schedule totals reconcile with the gross estate section, and that descriptions clearly identify assets, ownership interests, and valuation sources.
Step 7: Address deductions and limitations
Analyze allowable deductions, including charitable deductions and marital deduction, recognizing that NRNC estates face statutory limitations and treaty-based adjustments.
Determine whether a qualified domestic trust structure affects marital deduction eligibility.
Attach required schedules or supporting statements as instructed, including portions of Form
706 where applicable, to substantiate deduction claims properly.
Step 8: Compute estate and GST tax accurately
Calculate the taxable estate, estate taxes, and any generation-skipping transfer tax using the recap sections of Form 706-NA, following the form’s layout precisely. Do not reference schedules or labels not used by Form 706-NA.
Include GST exemption considerations only when relevant, ensuring computations align with generation-skipping trust rules and estate tax inclusion period concepts.
Step 9: Verify signatures and identification requirements
Confirm the executor signs and dates the return, using appropriate identification numbers as permitted, since many nonresident alien decedents lack a Social Security number. Obtain an estate EIN if required for estate management.
Avoid assuming SSN-only rules apply; follow Internal Revenue Service instructions on acceptable identifiers and administrative compliance.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: File timely and retain records
File Form 706-NA within nine months of death unless an extension of time is obtained using the
Application for Extension of Time, commonly Form 4768. Verify the current IRS filing address before submission.
Retain complete copies, tracking details, and proof of timely filing to support later requests for a tax closing letter, TC 421 processing, or IRS transfer certificate.
Special notes for 2020 usage
Form 706-NA applies only to estate and generation-skipping transfer taxes and does not incorporate income tax credits or unrelated federal programs. Keep the filing focused on transfer taxes and statutory requirements.
Professional advice may be appropriate for international estate planning, portability election analysis, or complex treaty-driven positions involving covered expatriates or cross-border assets.
Practical quality review
Confirm all U.S. situs assets are listed, valued, and supported, deductions are appropriately documented, computations reconcile, and translations are included where required. Review compliance with the filing deadline, extension documentation, and record retention before mailing.
This checklist serves as a practical reference guide and does not replace advice from tax attorneys or estate planning professionals familiar with wealth transfer taxation and nonresident estate compliance.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
