What Form 706-NA (2011) Is For
IRS Form 706-NA (2011) is the United States Estate (and Generation-Skipping Transfer) Tax Return for Nonresidents who are not citizens. This form applies to the estates of individuals who were not U.S. citizens or residents at the time of death but owned property or assets located within the United States. It determines whether an estate owes U.S. estate tax and reports those U.S.-situated assets to the Internal Revenue Service.
This form only applies to assets physically or legally connected to the United States. Real estate, U.S. corporate stock, or tangible personal property located in the country must be reported. Assets held outside the United States are listed for informational purposes but are not subject to U.S. estate tax.
For a detailed breakdown of filing requirements, eligibility rules, and step-by-step instructions, see our IRS Form 706-NA (2011): Estate Tax Guide for Nonresidents.
When You’d Use Form 706-NA
Executors use Form 706-NA when a deceased nonresident, non-U.S. citizen owned U.S.-situated assets exceeding 60,000 dollars at the date of death. These assets include U.S. real estate, corporate stock, or tangible property physically located in the country. The form determines the amount of U.S. estate tax owed and ensures compliance with federal filing requirements.
Form 706-NA must generally be filed within nine months of the date of death. Executors who need additional time may submit Form 4768 to request an extension. However, this extension only applies to filing—the estate tax payment remains due by the original deadline to avoid interest or penalties.
Key Rules or Details for 2011
For the 2011 tax year, estates of nonresident, non-U.S. citizens were required to file Form 706-NA if U.S.-situated assets exceeded $60,000. The unified credit was generally 13,000 dollars, and the maximum estate tax rate was 35 percent. The generation-skipping transfer tax rate was zero for transfers made in 2010 and 35 percent for transfers made in 2011. Property such as U.S. real estate, tangible assets, and corporate stock was taxable, while foreign assets and certain bank deposits were exempt under U.S. tax rules or applicable treaties.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide for Estate, Gift, and Trust Forms.
Step-by-Step (High Level)
An executor completing Form 706-NA should follow these steps.
Step 1: Collect Essential Documents
An executor should gather a certified copy of the death certificate, the will, and an inventory of all U.S.-situated assets with date-of-death values. Appraisals, prior U.S. gift tax returns, and proof of executor authority are also required.
Step 2: Verify Executor Status
The executor should confirm the appointment with a certified court order or a will designation. If no executor has been appointed, the individual holding U.S. property on behalf of the decedent must file the return.
Step 3: Complete Required Sections
Each U.S. asset must be listed on Schedule A with full details. Deductions for funeral expenses, debts, and charitable contributions should be applied where allowed.
Step 4: Apply Deductions and Credits
The executor should use applicable deductions and unified credits under the Internal Revenue Code or relevant treaties. If the decedent was from a treaty country, the estate must include a statement showing credit calculations and reference the treaty article.
Step 5: Pay and File by the Due Date
Payment should be made payable to “United States Treasury.” Tax payments must be submitted by the original deadline to prevent penalties or interest.
Step 6: Submit to the Correct Address
The completed Form 706-NA, attachments, and payment should be mailed to:
Internal Revenue Service
Cincinnati, OH 45999
Common Mistakes and How to Avoid Them
- Misclassifying property location: Always treat stock in a U.S. corporation as a U.S. asset, no matter where the certificates are physically held.
- Failing to meet the filing threshold: Calculate the total value of all U.S.-based assets; file Form 706-NA if they exceed $60,000.
- Omitting executor documentation: Attach certified court orders or relevant will sections to prove executor authority and avoid processing delays.
- Confusing filing and payment extensions: Remember that Form 4768 extends only the filing deadline; taxes must still be paid within nine months of death.
- Ignoring treaty benefits: Review applicable estate tax treaties and include all supporting documentation to claim credits or exemptions that reduce U.S. tax liability.
Following these steps ensures Form 706-NA is filed accurately, on time, and without unnecessary IRS delays.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
After Form 706-NA is submitted, the IRS reviews the estate tax return for accuracy and completeness. If corrections or documentation are required, the IRS will notify the executor by mail. Some returns may be selected for examination, especially those involving high-value assets or treaty claims. Once the process is complete, the executor can request confirmation or a transfer certificate to finalize estate matters.
FAQs
What is IRS Form 706-NA (2011) used for?
IRS Form 706-NA (2011) is the estate tax return for nonresident, non-U.S. citizens who owned property or assets in the United States at death. It reports taxable U.S.-situated property and calculates any estate tax owed to the IRS.
When is the tax deadline to file this estate tax return?
The tax deadline to file Form 706-NA (2011) is nine months after the date of death. If the due date falls on a legal holiday or weekend, the next business day becomes the official filing deadline for the estate.
Can this estate tax return be filed electronically?
IRS Form 706-NA (2011) cannot be filed electronically. Executors must mail the completed form, supporting schedules, and any tax payments to the IRS address listed in the filing instructions for proper processing.
What happens if the estate misses the filing deadline?
If the estate fails to file by the tax deadline, penalties and interest accrue on any unpaid taxes. Executors should file immediately, pay all taxes owed, and request an extension or penalty abatement if reasonable cause exists.
Can a surviving spouse or beneficiary claim deductions on this form?
A surviving spouse or eligible beneficiary may claim deductions for funeral expenses, debts, and trust assets when calculating the taxable value of the estate. The deductions must comply with IRS rules and apply only to U.S.-situated assets.
Are bank accounts or other assets included in the taxable estate?
Bank accounts are generally exempt from U.S. estate taxation unless connected with a U.S. business. Other assets, such as real property, corporate stock, and certain trust assets, are typically considered taxable under Form 706-NA guidelines.
Can calendar-year filers and fiscal-year estates request an extension?
Executors for calendar year filers or fiscal year estates may request an extension by submitting Form 4768. However, this extension only applies to filing, not payment, so any estate tax owed must still be paid by the original due date.
