Form 706-NA (Rev. August 2013) Compliance Checklist
Why 2013 Form 706-NA is Unique
The 2013 Form 706-NA applies exclusively to nonresident alien decedents who die after December 31, 2011, and taxes only U.S.-situs assets under a $13,000 unified credit and a $5,250,000 basic exclusion. Unlike Form 706 (for citizens/residents), this form limits marital deduction eligibility to U.S. citizen surviving spouses or qualified domestic trusts and restricts generation-skipping transfer exemption allocation. No portability election is available to nonresident beneficiaries.
The 2013 instructions do not contain stimulus reconciliation, ACA shared responsibility payments, TCJA provisions, or ARPA expansions. The unified credit and basic exclusion for 2013 remain fixed at $2,045,800 and $5,250,000, respectively, as indexed under prior law. Estate and GST tax rates remain at a maximum of 40 percent under IRC Section 2001(c), with no temporary adjustments. The filing threshold remains $60,000 of U.S.-situs property, unchanged from prior years and not indexed for inflation.
Ten-Step Checklist for 2013 Form 706-NA
1. Verify Filing Requirement and Deadline
File Form 706-NA if decedent’s U.S.-situs gross estate (valued at death) exceeds $60,000. File within 9 months of death. If unable to meet deadline, file Form 4768 for automatic 6-month extension (check “Form 706-NA” in Part II). Extension grants time to file only; tax payment remains due within the original 9-month period.
For 2013, the filing threshold of $60,000 applies to the aggregate of U.S.-situs property, adjusted taxable gifts of U.S. property made after December 31, 1976, and the gift tax specific exemption claimed for gifts made between September 9, 1976, and December 31, 1976. If the total exceeds $60,000, filing is mandatory, regardless of whether tax is ultimately due after applying deductions and credits.
2. Gather Decedent Documentation
Obtain a certified copy of the will (if testate) or court-issued letters of administration. Attach the death certificate. If decedent ever held U.S. citizenship or residency, document loss date and whether loss occurred within 10 years of death (expatriation rules per IRC 2107).
Secure all Forms 709 (gift tax returns) filed by decedent post-1976. For 2013, if the decedent expatriated after June 17, 2008, special provisions under IRC 877A may apply, requiring additional documentation of tax compliance and covered expatriate status. Obtain passport records, visa documentation, and any IRS correspondence regarding citizenship renunciation or residency status to establish nonresident alien classification at the date of death.
3. Inventory U.S.-Situs Assets Only
List only property physically located in or legally connected to the U.S.: real estate, tangible personal property, U.S. corporate stock, debt of U.S. persons. Exclude foreign bank accounts, foreign real estate, foreign securities, and artwork with no U.S. presence. Allocate joint property in accordance with IRC Section 2040 rules—complete Schedule A (Gross Estate in the United States).
For 2013, U.S.-situs property includes stock in U.S. corporations regardless of where certificates are physically held, debt obligations of U.S. persons or entities, deposits with U.S. branches of banks, and life insurance proceeds from U.S. insurers. Provide CUSIP numbers for securities, legal descriptions for real estate, and fair market value determinations as of the date of death. Attach qualified appraisals for hard-to-value assets.
4. Calculate Deductible Expenses and Debts
Itemize funeral expenses, estate administration costs, claims against the estate, and unpaid mortgages/liens. Compute pro-rata deduction on Schedule B, line 5, by formula: (U.S. gross estate divided by entire gross estate) multiplied by total expenses. Attach an itemized schedule specifying nature, amount, and creditor name—no deduction for taxes on income received after death or property taxes accrued after death.
For 2013, allowable deductions include executor fees, attorney fees, accountant fees, court costs, and appraisal fees, but only to the extent allocable to U.S.-situs property. Document the worldwide gross estate value even though only U.S. property is taxed, as this figure is required for the pro-rata deduction calculation. Maintain receipts and invoices for all claimed expenses.
5. Claim Marital Deduction (If Applicable)
Marital deduction available only if (1) surviving spouse is a U.S. citizen at the date of decedent’s death, OR (2) property passes to a qualified domestic trust (QDOT) described in section 2056A with an election made on Schedule M of Form 706, unless treaty provides otherwise. Attach Schedule M (Form 706) showing property passing to spouse and election for QTIP if applicable.
For 2013, if property passes to a noncitizen spouse via QDOT, the executor must elect QDOT treatment on Schedule M and ensure the trust meets all requirements of section 2056A, including designation of a U.S. trustee and provisions ensuring estate tax collection on distributions or at the surviving spouse’s death—document spousal citizenship status with passport copies or naturalization certificates.
6. Claim Charitable Deduction (If Applicable)
If property passes to a qualified charity, attach Schedule O (Form 706) itemizing each organization, amount, and character. The charitable deduction is allowed for the fair market value of property that passes to or for the use of a qualified organization. The deduction reduces the taxable estate and is not limited or reduced by estate or GST taxes charged to the charitable property; instead, those taxes are computed after applying the deduction.
Attach charity documentation and excerpts from wills and trusts. For 2013, qualified charities for nonresident alien estates are limited to organizations created or organized in the United States or property transferred for use within the United States. Foreign charities generally do not qualify unless a tax treaty provides otherwise. Obtain IRS determination letters confirming charitable status for all claimed deductions.
7. Attach All Required Schedules and Elections
Suppose claiming marital deduction: Schedule M (Form 706). Suppose claiming charitable deduction: Schedule O (Form 706). If joint property exists: Schedule E (Form 706). If transfers under IRC 2035–2038: Schedule G (Form 706). If powers of appointment held: Schedule H (Form 706). If GST tax applies: Schedules R and/or R-1 (Form 706). If credit is claimed for prior transfers, use Schedule Q (Form 706).
For 2013, ensure all Form 706 schedules attached to Form 706-NA are completed adequately with amounts converted to U.S. dollars using exchange rates as of the date of death. If claiming special use valuation or conservation easement exclusion, note that these provisions generally are not available to nonresident alien estates unless treaty provisions apply. Attach all trust instruments, partnership agreements, and corporate documentation supporting reported values.
8. Compute Tax Using 2013 Rates and Credit
On Part II: Enter taxable estate (line 1), taxable gifts post-1976 (line 2), and combined total (line 3). Calculate tentative tax on the combined amount using Table A Unified Rate Schedule (40 percent top rate). Subtract tentative tax on gifts-only. Unified credit allowed is the lesser of the calculated amount on line 6 or a maximum of $13,000. Any prior gift tax paid reduces the unified credit dollar for dollar.
For 2013, the unified tax rate schedule for transfers imposes a tax ranging from 18 percent on the first $10,000 to 40 percent on amounts exceeding $1,000,000. The $13,000 maximum unified credit for nonresident aliens corresponds to tax on approximately $60,000 of taxable transfers. If the decedent made taxable gifts of U.S. property after 1976, obtain copies of all Forms 709 filed to verify gift amounts and credit previously used.
9. Complete Part III and Sign Return
Answer all 11 questions in Part III (General Information). If you say "yes" to joint property transfers, trusts, powers, or GST transfers, attach the corresponding schedules. Both executors must sign the return under penalty of perjury and date it. If a paid preparer signs, the preparer must print their name, sign, date, check the self-employed box if applicable, and provide their PTIN, firm name, address, EIN, and phone number.
For 2013, Part III questions include disclosure of business interests, safe deposit boxes, joint ownership arrangements, lifetime transfers, trust creations, powers of appointment, and generation-skipping transfers. Provide complete and accurate answers to all questions, as incomplete returns may delay processing or trigger examination. If multiple executors are appointed, all are jointly responsible, though only one signature is required.
10. Verify Assembly and Submit
Attach death certificate (required). Staple all pages in order: Form 706-NA, Schedule A, Schedule B, Part III answers, all applicable schedules (M, O, E, G, H, R, Q), certifications (will, death tax certificates), and appraisals. Show all amounts in U.S. dollars. Translate non-English documents. Mail the complete return to the address specified in the 2013 instructions for the relevant state. Retain a copy for executor records.
For 2013, if a foreign currency conversion is required, use exchange rates published by the Federal Reserve or another recognized authority as of the date of death. Attach certification of translation for all non-English documents, including wills, trust instruments, foreign death certificates, and foreign tax returns. File the original return by mail to the IRS address designated for Form 706-NA; electronic filing is not available. Keep complete copies of all documentation for a minimum of seven years.
Line and Schedule Changes from Prior Versions (2013)
The 2013 instructions for Form 706-NA do not document changes from an immediately prior revision. The August 2013 version represents the form in use for all decedents who died after December 31, 2011, with no interim structural modifications specified. Credit calculations and the unified credit amount ($13,000 maximum for nonresident noncitizens) remained consistent from 2012, unless IRC amendments applied (none relevant to 706-NA filing mechanics).
The form structure continues to follow the same three-part organization: Part I (Decedent and Executor Information), Part II (Tax Computation), and Part III (General Information). Schedules attached from Form 706 (citizen/resident return) are used to report specific categories of property and deductions, adapted for nonresident alien circumstances.
Form 706-NA Specific Limitation Reminders
Nonresident aliens cannot elect portability of the deceased spouse's unused exclusion (DSUE) to the surviving spouse. A marital deduction is unavailable unless the surviving spouse qualifies as a U.S. citizen or the property passes to a QDOT. Expatriate decedents subject to IRC 877(b) (if applicable) must meet three tests: average annual net income tax liability, net worth threshold, or tax compliance certification per Form 8854.
The generation-skipping transfer exemption allocation is restricted and requires a Schedule R attached to Form 706-NA. For 2013, the GST exemption for nonresident aliens is limited to $5,250,000, the same as the basic exclusion amount, but applies only to generation-skipping transfers of U.S.-situs property. Foreign property is not subject to U.S. GST tax. Tax treaties may modify these limitations for residents of treaty countries, requiring careful review of applicable treaty provisions and attachment of treaty-based position disclosures.
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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.
