| Instructions for Form 706-NA |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Form 706-NA is used to compute estate and generation-skipping transfer (GST) tax liability for nonresident alien decedents.
The estate tax is
imposed on the transfer of the decedent's taxable estate rather than on the receipt of any part of it.
For information about transfer certificates for U.S. assets, write to the following address:
Internal Revenue Service
Estate Tax Group
S:SE:SP:EG:EC:1206
1111 Constitution Ave. NW, LE-4435
Washington, DC 20224
Note.
In order to complete this return, you must obtain Form 706, United States Estate (and Generation-Skipping Transfer)
Tax Return, and its separate
instructions. You must attach schedules from Form 706 if you intend to claim a marital deduction, a charitable deduction,
a qualified conservation
easement exclusion, or a credit for tax on prior transfers, or if you answer “ Yes” to question 5, 7, 8, 9a, 9b, or 11 in Part III, General
Information. You will need the instructions to Form 706 to explain how to value stocks and bonds. Make sure that you use the version
of Form 706
that corresponds to the date of the decedent's death.
The following definitions apply in these instructions.
United States.
The United States means the 50 states and the District of Columbia.
Nonresident alien decedent.
A nonresident alien decedent is a decedent who is neither domiciled in nor a citizen of the United States at the time of death.
For purposes of
this form, a citizen of a U.S. possession is not a U.S. citizen.
Long-term United States resident.
A long-term U.S. resident is an alien who is a lawful permanent resident of the U.S. in at least eight of the last fifteen
taxable years ending
with the taxable year in which U.S. residency is terminated.
Executor.
An executor is the personal representative, executor, executrix, administrator, or administratrix of the deceased
person's estate. If no executor
is appointed, qualified, and acting in the United States, every person in actual or constructive possession of any of the
decedent's property must
file a return. If more than one person must file, it is preferable that they join in filing one complete return. Otherwise,
each must file as complete
a return as possible, including a full description of the property and each person's name who holds an interest in it.
U.S. expatriate.
Generally, a U.S. expatriate is one who, within ten years before the date of death, lost U.S. citizenship or (in
certain cases) ended long-term
U.S. residency with the principal purpose of avoiding U.S. taxes. See the instructions for Question 6a and Question 6b on page
2. Also, see effective dates below for more information.
After June 3, 2004.
A citizen or long-term resident, who lost U.S. citizenship or residency after June 3, 2004, is subject to the alternative
tax regime of section 877
when the individual:
-
Has average annual net income tax in excess of $131,000 (for 2006) for the 5 taxable years preceding the loss of U.S.
citizenship;
-
Has a net worth of $2,000,000 or more on the date of the loss of U.S. citizenship; or
-
Fails to certify compliance with all federal tax obligations for the five preceding taxable years, unless he or she is a minor
or a dual
citizen without substantial contact with the United States. See sections 877(c)(2)(B) and (c)(3), for more information.
On or after February 6, 1995.
Under prior law, citizens or certain long-term residents (as defined in section 877(e)), who lost U.S. citizenship
or residency on or after
February 6, 1995, are presumed to have the principal purpose of avoiding U.S. taxes, if the decedent's average annual net
income tax liability or net
worth exceeds certain limits. However, the executor has an opportunity to prove otherwise. See sections 877(a)(1), (2), and
(c), before its amendment
by Public Law 108-357, for more information.
The executor must file Form 706-NA if the date of death value of the decedent's gross estate located in the United States
under Internal Revenue
Code situs rules exceeds the filing limit. The filing limit is $60,000 reduced by the sum of:
-
the gift tax specific exemption (section 2521) allowed with respect to gifts made between September 9, 1976, and December
31, 1976,
inclusive, and
-
the total taxable gifts made after December 1976, that are not included in the gross estate.
File Form 706-NA within 9 months after the date of death unless an extension of time to file was granted.
Form 706-NA must be filed at:
Internal Revenue Service Center
Cincinnati, OH 45999
The law provides for penalties for both late filing of returns and late payment of tax unless there is reasonable cause for
the delay. There are
also penalties for willful attempts to evade or defeat payment of tax.
The law also provides for penalties for valuation understatements that cause an underpayment of tax. See sections 6662(g)
and (h) for more details.
Death tax treaties are in effect with the following countries:
|
Australia
|
Italy
|
|
Austria
|
Japan
|
|
Canada*
|
Netherlands
|
|
Denmark
|
Norway
|
|
Finland
|
South Africa
|
|
France
|
Sweden
|
|
Germany
|
Switzerland
|
|
Greece
|
United Kingdom
|
|
Ireland
|
|
|
*Article XXIX B of the United States—Canada Income Tax Treaty
|
If you are reporting any items on this return based on the provisions of a death tax treaty or protocol, you may have to attach
a statement to this
return disclosing the return position that is treaty based. See Regulations section 301.6114-1 for details.
Previous | Index | Next
2006 Instructions Main | 2006 Tax Help Archives | Tax Help Archives Main | Home
|
|
 |
