IRS Form 706-NA (2019): Tax Year-Specific Compliance Checklist
Why 2019 Form 706-NA Matters
The 2019 revision clarifies rules for nonresident aliens who die after December 31, 2011. The $60,000 filing threshold for U.S.-situated assets (unchanged since 2012) remains in effect; the unified credit peaks at a maximum of $13,000 for nonresident aliens. Schedule B calculations require proration of deductible expenses between the U.S. and foreign estate portions, as per the fixed formula on line 5.
The 2019 Form 706-NA continues to apply the unified transfer tax system to nonresident alien decedents, taxing only property with U.S. situs at rates ranging from 18 percent to 40 percent. Unlike Form 706 for U.S. citizens and residents, Form 706-NA provides no portability election, no increased exclusion amounts indexed for inflation beyond the $60,000 threshold, and strictly limits marital and charitable deductions based on citizenship and use requirements.
2019 Year-Specific Programs Applicable to Form 706-NA
No estate stimulus reconciliation, shared responsibility payments, or TCJA sunset-extension rules apply to Form 706-NA itself for 2019. Canadian residents may claim slight estate relief under the 1995 Protocol if the worldwide estate does not exceed CAD $1.2 million and is subject to U.S. federal estate tax on U.S. securities or situs property; this treaty relief must be elected on Form 706-NA with a supporting statement, not listed on Part V.
For 2019, the generation-skipping transfer tax exemption for nonresident aliens is limited to U.S.-situs property only, and no DSUE portability provisions apply. Tax treaties with specific countries may modify these general rules, requiring careful review of applicable treaty provisions and proper disclosure on the return.
Ten-Step Compliance Checklist for 2019 Form 706-NA
1. Verify Filing Requirement and Determine Threshold Compliance
Calculate the total of the decedent’s U.S.-situated assets plus gift tax specific exemption (gifts made September 9, 1976, through December 31, 1976) plus adjusted taxable gifts (gifts made after December 31, 1976). If the sum exceeds $60,000, a Form 706-NA filing is mandatory.
For 2019, the $60,000 threshold is not indexed for inflation and remains fixed regardless of the decedent’s country of residence or worldwide estate value. Include in this calculation the value of all U.S.-situs property irrespective of whether it ultimately qualifies for treaty exemption or other relief, as the filing requirement is determined before application of deductions and credits.
2. Determine Executor Status and Gather Proof of Appointment
Identify all persons in possession of decedent’s property as potential executors. The executor must provide a certified copy of the will, court order, or letters testamentary; the executor’s own attestation is insufficient. For 2019, if multiple executors are appointed, list all names, addresses, and taxpayer identification numbers on the return.
All executors are jointly and severally liable for proper filing and payment of tax, though only one signature is required. If no executor is appointed, the person in actual or constructive possession of the decedent’s U.S.-situs property has a duty to file Form 706-NA.
3. Gather Decedent Identification and Death Documentation
Collect the decedent’s full name, social security number (if any) or individual taxpayer identification number (ITIN), date of birth, place of birth, date of death, place of death, and citizenship/nationality. Attach a certified copy of the death certificate to Form 706-NA.
For 2019, if the decedent was a green card holder (lawful permanent resident) but not domiciled in the United States at death, the decedent is classified as a nonresident alien for estate tax purposes and must file Form 706-NA rather than Form 706. Document domicile status with evidence of permanent home, intent to remain, and connections to the home country versus the United States.
4. Compile U.S.-Situs Asset Documentation and Determine Asset Location
List only property physically located in the U.S. on Part V (formerly Schedule A). U.S. corporate stock is U.S. situs regardless of certificate location; real estate and tangible personal property are U.S. situs if physically present there; debt obligations issued after July 18, 1984, are generally U.S.-situs only if interest is not exempt under IRC section 871(h)(1); bank deposits and insurance company amounts are generally U.S. situs; however, deposits in a foreign branch of a U.S. bank are treated as located OUTSIDE the United States if not effectively connected with conducting a trade or business within the United States, per IRC section 2105(d) and Treasury Regulations.
For 2019, provide CUSIP numbers for all securities, legal descriptions for real estate, and detailed descriptions of tangible personal property. Obtain qualified appraisals for hard-to-value assets dated as of the date of death.
5. Calculate Proportional Deduction for Expenses and Claims (Required Formula)
On Part IV (formerly Schedule B), line 6: divide U.S. gross estate (line 1) by the entire worldwide gross estate (line 3), then multiply by total funeral expenses, administration expenses, debts, mortgages, liens, and uncompensated losses (line 4). Only this proportional amount is deductible; document all expenses with an itemized schedule.
For 2019, allowable expenses include executor fees, attorney fees, accountant fees, court costs, appraisal fees, and other administration expenses, but only the portion allocable to U.S.-situs property based on the proportional formula.
Attach receipts, invoices, and supporting documentation for all claimed expenses. The proportional deduction rule prevents double benefit where foreign death taxes are also paid.
6. Compile and Attach Mandatory Schedules and Foreign Documentation
If claiming marital or charitable deductions, attach Schedule M and Schedule O (Form 706) with detailed computation; if claiming credit for tax on prior transfers, attach Schedule Q (Form 706). If decedent transferred interests to skip persons, attach Schedules R and/or R-1 (Form 706) reporting only U.S.-located property interests.
Attach a certified copy of the foreign death tax return filed, or if none was filed, a certified copy of the estate inventory and schedule of debts filed with the foreign probate court.
For 2019, the marital deduction is available only if the surviving spouse is a U.S. citizen or the property passes to a qualified domestic trust (QDOT). Charitable deduction is limited to transfers to organizations created or organized in the United States, or for use within the United States. Provide IRS determination letters and documentation of charitable status.
7. Apply Alternate Valuation Election (If Advantageous)
If electing alternate valuation date under IRC section 2032, check “Yes” on Part V, line 1 (formerly Schedule A). Alternate valuation applies to all property; the election reduces both the gross estate value and the net estate tax after all credits. The six-month valuation period applies; property sold or disposed of within six months is valued as of the disposition date.
For 2019, alternate valuation may be elected only if it decreases both the value of the gross estate and the sum of estate tax and GST tax liability. Once made, the election is irrevocable. Document all valuations as of the alternate valuation date with appraisals, brokerage statements, and sales records.
8. Calculate Taxable Estate and Gross Estate Tax (Part II, Lines 1–6)
Line 1: Enter taxable estate from Part IV, line 10.
Line 2: Enter total taxable gifts of U.S. tangible or intangible property (directly or indirectly transferred) made after December 31, 1976, and not included in gross estate.
Line 3: Sum lines 1 and 2.
Line 4: Calculate the tentative tax on line 3 using the IRC section 2001 rate table for the applicable year.
Line 5: Calculate tentative tax on line 2 only.
Line 6: Subtract line 5 from line 4 (gross estate tax).
For 2019, the unified transfer tax rate schedule imposes a tax ranging from 18 percent on the first $10,000 to 40 percent on amounts exceeding $1,000,000. Obtain copies of all Forms 709 filed by the decedent to verify taxable gift amounts and dates.
9. Apply Unified Credit and Other Allowable Credits (Part II, Lines 7–12)
Line 7: Enter the lesser of the line 6 amount or the maximum unified credit allowed. For nonresident aliens not from U.S. possessions, the maximum unified credit is $13,000. If the decedent was a citizen of a U.S. possession (see IRC section 2209), the maximum is the greater of $13,000 or ($46,800 multiplied by the fraction where the numerator equals the U.S. estate portion and the denominator equals the total worldwide estate).
Line 9: Enter other allowable credits.
Line 10: If claiming credit for federal gift taxes or prior transfers, attach Schedule Q and enter the amount.
Line 11: Sum lines 9 and 10.
Line 12: Subtract line 11 from line 8 (balance after credits) to determine net estate tax.
For 2019, the $13,000 maximum unified credit corresponds to tax on approximately $60,000 of taxable transfers. Any unified credit previously used against gift tax reduces the estate tax credit dollar for dollar.
10. Calculate Generation-Skipping Transfer Tax and Prepare for Filing
Part II, Line 13: If any interests transfer to skip persons (as defined in IRC section 2611), complete Schedules R and/or R-1 (Form 706) reporting only U.S.-located property. Enter total GST tax.
Line 14: Sum lines 12 and 13 (total transfer taxes).
Line 15: Deduct earlier payments to IRS.
Line 16: Calculate final balance due, payable within 9 months of the decedent’s death unless an extension is granted via Form 4768.
File original Form 706-NA at the Department of the Treasury, Internal Revenue Service Center, Kansas City, MO 64999—sign and date Form 706-NA. If a paid preparer signs, they must complete the “Paid Preparer Use Only” section as per IRC section 7701(a)(36)(B). For 2019, electronic filing is not available for Form 706-NA; paper filing is required. Attach all the necessary schedules, documentation, and certifications in the order specified in the instructions. Keep complete copies of the filed return and all attachments for at least seven years.
Line Changes and Clarifications for 2019 Form 706-NA
Part II—Tax Computation, Lines 1–14 (Clarified for 2019):
The prior instruction approach referenced the general IRC Chapter 11 framework without explicitly referencing the generation-skipping transfer tax. The 2019 instruction approach separated Part II into distinct tax computation steps, providing expanded line-by-line guidance on the taxable gifts exclusion, the unified credit cap for nonresident aliens, and an explicit requirement to report GST tax on a new line (13), separate from the net estate tax on line 12. Line 14 consolidates total transfer taxes.
Change type: Clarified
Part IV—Taxable Estate (Redesigned from Schedule B in Prior Form)
The 2019 Form 706-NA reorganized Schedule B deduction calculations into Part IV (Lines 1–10). Line 5 now explicitly displays the proration formula: (U.S. estate divided by worldwide estate) multiplied by total expenses, claims, debts, mortgages, liens, and losses, to ensure the proper allocation of deductible expenses between the U.S. and non-U.S. portions.
Change type: Redesigned
Part V—Gross Estate in the United States (Clarified Asset Location Rules)
The 2019 instructions clarified that works of art are U.S.-situs only if, on the date of death, they were imported solely for public exhibition, on loan to a nonprofit public gallery or museum, or en route to/from an exhibition and excluded certain RIC stock portions (for decedents dying 2005–2011 only; the rule expired after 2011, so it is not applicable from 2019 forward).
Change type: Clarified
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
