(Rev. November 2020) -NA Future Developments

1 Userid: CPMS chema: instrxLeadpct: 100%Pt. size: Draft Ok to PrintAH XSL/XMLF ileid: .. s/I706NA/201609/A/XML/Cycle04/source(Ini t. & Date) _____Page 1 of 6 15:07 - 1-Sep-2016 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before for Form 706-NA(Rev. September 2016)United States Estate (and Generation-Skipping Transfer) Tax ReturnEstate of nonresident not a citizen of the United StatesDepartment of the TreasuryInternal Revenue ServiceSection references are to the Internal Revenue Code unless otherwise 's NewConsistent basis reporting. On July 31, 2015, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Public Law 114-41) was enacted. Section 2004 of the Act requires that estates report, both to the IRS and the recipient, the estate tax value of each asset included in the gross estate within 30 days of filing Form 706-NA or earlier if the return is filed late.

2 It also requires that the basis of certain assets when sold or otherwise disposed of must be consistent with the basis (estate tax value) of the asset when it was received by the beneficiary. To satisfy the new reporting requirements, the estate must file Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent. See Form 8971 and instructions at Additional guidance and other information necessary to fulfill the requirements of the Act are being developed. If you believe the new requirements impact this estate or its beneficiaries, please check for additional letter procedure. Effective for all estate tax returns filed on or after June 1, 2015, closing letters will not be issued unless requested by the executor of the estate or the designated power of attorney.

3 To allow time for processing, please wait at least four months after filing Form 706-NA to request a closing of an estate tax closing letter, the executor of the estate may request an account transcript, which reflects transactions including the acceptance of Form 706-NA and the completion of an examination. Account transcripts are available online to registered tax professionals using the Transcript Delivery System (TDS) or to authorized representatives making requests using Form 4506-T. Specific instructions are available for requesting online transcripts using the TDS or hardcopy transcripts using Form 4506-T. For questions about estate tax closing letter requests, call (866) 699-4083 or see the Frequently Asked Questions on Estate Tax at DevelopmentsFor the latest information about Developments related to Form 706-NA and its instructions , such as legislation enacted after they were published, go to InstructionsPurpose of FormForm 706-NA is used to compute estate and generation-skipping transfer (GST) tax liability for nonresident alien decedents.

4 The estate tax is imposed on the transfer of the decedent's taxable estate rather than on the receipt of any part of information about transfer certificates for assets, write to the following Revenue ServiceCincinnati, OH 45999 Stop 824 GNote. In order to complete this return, you must obtain Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and its 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 following definitions apply in these States.

5 The United States means the 50 states and the District of 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 possession is not a United States resident. A long-term resident is an alien who has been a lawful permanent resident of the (green card holder) in at least 8 of the last 15 tax years ending with the tax year in which residency is 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.

6 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 must provide documentation proving their status. Documentation will vary but may include a certified copy of the will or a court order designating the executor(s). A statement by the executor(s) attesting to their status is expatriate. Special estate tax rules may apply to decedents who expatriated from the United States prior to death. For these purposes, both citizens who relinquished their citizenship and long-term residents, as defined in section 877(e), who have surrendered their green card or taken a position under a tax treaty that they are solely a resident of the other country, are treated as decedents who expatriated prior to June 17, 2008, and were still subject to the 10-year alternative tax regime of section 877(b) on the date of death, the rules in section 2107 apply to determine the value of decedent s taxable estate.

7 For decedents who expatriated on or after June 17, 2008, and were Sep 01, 2016 Cat. No. 63118 NPage 2 of 6 Fileid: .. s/I706NA/201609/A/XML/Cycle04/source15:0 7 - 1-Sep-2016 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. covered expatriates on the date of death, as defined in section 877A(g)(1), the rules in section 2107 do not apply, but the rules of section 2801 may apply. So, decedents who expatriated on or after June 17, 2008 are generally subject to estate tax as all other nonresident alien decedents, and the references to expatriate in these instructions refer only to decedents who expatriated prior to June 17, 2008. See the instructions for Question 6a and Question 6b, later. Also, see effective dates later for more after June 3, 2004, but before June 17, 2008.

8 A decedent would have been subject to the 10-year alternative tax regime of section 877(b) if the individual met one of three tests set out under section 877(a) relating annual net income tax liability, worth, of tax sections 877 and 2701, and Form 8854, Initial and Annual Expatriation Statement, as it existed in the relevant tax year for additional on or after February 6, 1995, through June 3, 2004. A decedent would have been presumed to be subject to the 10-year alternative tax regime of section 877(b) if the individual's average annual net income tax liability or net worth exceeded certain limits, absent a private letter ruling reversing the presumption. See sections 877 and 2701 and Form 8854 as they existed in the relevant tax year for additional Must FileThe executor must file Form 706-NA if the date of death value of the decedent s assets, together with the gift tax specific exemption and the amount of adjusted taxable gifts, exceeds the filing threshold of $60,000.

9 The gift tax specific exemption refers to the amount allowed for gifts made by the decedent between September 9, 1976 and December 31, 1976, inclusive. The amount of adjusted taxable gifts refers to the amount of adjusted taxable gifts made by the decedent after December 31, To FileFile Form 706-NA within 9 months after the date of death unless an extension of time to file was you are unable to file Form 706-NA by the due date, use Form 4768, Application for Extension of Time To File a Return and/or Pay Estate (and Generation-Skipping Transfer) Taxes, to apply for an automatic 6-month extension of time to file. Check the Form 706-NA box in Part II of Form To FileFile Form 706-NA at the following of the TreasuryInternal Revenue Service CenterCincinnati, OH 45999 PenaltiesThe law provides for penalties for both late filing of returns and late payment of tax unless there is reasonable cause for the delay.

10 There are also penalties for willful attempts to evade or defeat payment of law also provides for penalties for valuation understatements that cause an underpayment of tax. See sections 6662(g) and (h) for more cause determinations. If you receive a notice about penalties after you file Form 706-NA, send an explanation and we will determine if you meet reasonable cause criteria. Do not attach an explanation when you file Form 706-NA. Explanations attached to the return at the time of filing will not be preparer. The Small Business and Work Opportunity Tax Act of 2007 (2007 Act) extended the application of return preparer penalties to preparers of estate tax returns. Under section 6694, as amended by the 2007 Act, estate tax return preparers who prepare any return or claim for refund that reflects an understatement of tax liability due to willful or reckless conduct are subject to a penalty of $5,000 or 50% of the income derived (or income to be derived), whichever is greater, for the preparation of each such return.