When foreign investors own U.S. property, their estate planning requires attention to both legal and tax requirements. Many are surprised to learn that completing probate addresses only the legal aspect of property transfer. Without proper tax planning, beneficiaries could face unexpected and substantial IRS bills when selling inherited property.
Janet Noack CPA, known professionally as the "FIRPTA FIXER," emphasizes a crucial yet often overlooked solution: the Estate Tax Return (IRS Form 706-NA). "Many foreign property owners don't realize that skipping this tax filing could leave their beneficiaries with a zero basis in the inherited property, potentially creating a significant tax burden," explains Noack.
The 706-NA serves multiple essential purposes:
Establishes asset values at death
Claims applicable treaty positions
Transfers property ownership to beneficiaries
Secures a stepped-up basis to fair market value at death
Perhaps most significantly, filing Form 706-NA can increase the value threshold from $60,000 to approximately $12 million – the same as U.S. citizens. This dramatic increase can make a substantial difference in estate tax liability.
The consequences of missing this critical filing underscore why many foreign property owners turn to specialized expertise.
Foreign Tax CPA combines deep knowledge of international tax treaties with practical experience in foreign estate tax requirements, ensuring both legal and tax aspects are properly addressed when transferring U.S. property assets.
Kat Rogers
🌍 Foreign Tax CPA
Professional CPA guidance for foreign owners of U.S. property and the professionals who serve them.
Phone: +1 (321) 784-8329
What’s App: +1 (941) 200-1040
Mon-Fri, 8:00 AM - 4:00 PM EST
