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Instructions for Form

Department of the Treasury

Internal Revenue Service

706-NA

(Rev. September 2005)

United States Estate (and Generation-Skipping Transfer) Tax Return

Estate of nonresident not a citizen of the United States

(To be filed for decedents dying after December 31, 2004.)

Section references are to the Internal Revenue Code unless otherwise noted.

For information about transfer

Part III. See effective dates, below, for

What’s New

TIP

certificates for U.S. assets, write

more information.

•

to the following address:

For individuals who lose U.S.

After June 3, 2004. Under the

citizenship or end long-term U.S.

AJCA, a citizen or long-term resident,

Internal Revenue Service

residency after June 3, 2004, the

who lost U.S. citizenship or residency

Estate Tax Group

American Jobs Creation Act of 2004

after June 3, 2004, is subject to the

SE:S:SP:IN:T1:1114

(AJCA) has amended the rules used to

alternative tax regime of section 877

1111 Constitution Ave. NW, LE-4435

determine whether tax avoidance was

where the individual:

Washington, DC 20224

•

the individual’s principal purpose. See

Has average net income tax in

Definitions, below.

Definitions

excess of $127,000 (for 2005) for the

•

For the estate of a nonresident alien

five taxable years preceding the loss of

The following definitions apply in these

decedent dying after December 31,

U.S. citizenship;

instructions.

•

2004, a portion of the decedent’s stock

Has a net worth of $2,000,000 or

in a regulated investment company may

United States. The United States

more on the date of the loss of U.S.

be exempt from U.S. estate tax. See

means the 50 states and the District of

citizenship; or

•

Stock in a Regulated Investment

Columbia.

Fails to certify compliance with all

Company (RIC) on page 3.

federal tax obligations for the five

Nonresident alien decedent.

•

preceding taxable years, unless he or

The state death tax credit has been

A nonresident alien decedent is a

repealed for estates of decedents dying

she is a minor or a dual citizen without

decedent who is neither domiciled in

substantial contact with the United

after December 31, 2004. Beginning in

nor a citizen of the United States at the

States. See sections 877(c)(2)(B) and

2005, the credit will be replaced with a

time of death. For purposes of this

(c)(3), for more information.

state tax deduction against the value of

form, a citizen of a U.S. possession is

the gross federal estate. See Schedule

not a U.S. citizen.

On or after February 6, 1995.

B — Taxable Estate, Line 7, on page 4.

Under prior law, citizens or certain

Long-term United States resident.

long-term residents (as defined in

A long-term U.S. resident is an alien

Completing Form 706-NA. In order to

section 877(e)), who lost U.S.

who is a lawful permanent resident of

complete this return, you must obtain

citizenship or residency on or after

the U.S. in at least eight of the last 15

Form 706, United States Estate (and

February 6, 1995, are presumed to

taxable years ending with the taxable

Generation-Skipping Transfer) Tax

have the principal purpose of avoiding

year in which U.S. residency is

Return, and its separate instructions.

U.S. taxes, if the decedent’s average

terminated.

You must attach schedules from Form

annual net income tax liability or net

706 if you intend to claim a marital

Executor. An executor is the personal

worth exceeds certain limits. However,

deduction, a charitable deduction, a

representative, executor, executrix,

the executor has an opportunity to

qualified conservation easement

administrator, or administratrix of the

prove otherwise. See sections

exclusion, or a credit for tax on prior

deceased person’s estate. If no

877(a)(1), (2), and (c), before its

transfers, or if you answer “Yes” to

executor is appointed, qualified, and

amendment by P.L. 108-357, for more

question 5, 7, 8, 9a, 9b, or 11 in Part III,

acting in the United States, every

information.

General Information. You will need the

person in actual or constructive

instructions to Form 706 to explain how

possession of any of the decedent’s

Who Must File

to value stocks and bonds. Make sure

property must file a return. If more than

that you obtain the revision of Form 706

one person must file, it is preferable

The executor must file Form 706-NA if

that is applicable for the date of the

that they join in filing one complete

the date of death value of the

decedent’s death.

return. Otherwise, each must file as

decedent’s gross estate located in the

complete a return as possible, including

United States under Internal Revenue

General Instructions

a full description of the property and

Code situs rules exceeds the filing limit.

each person’s name who holds an

The filing limit is $60,000 reduced by

interest in it.

the sum of:

Purpose of Form

•

the gift tax specific exemption

U.S. expatriate. Generally, a U.S.

Form 706-NA is used to compute estate

(section 2521) allowed with respect to

expatriate is one who, within 10 years

and generation-skipping transfer (GST)

gifts made between September 9,

before the date of death, lost U.S.

tax liability for nonresident alien

1976, and December 31, 1976,

citizenship or (in certain cases) ended

decedents. The estate tax is imposed

inclusive, and

long-term U.S. residency with the

•

on the transfer of the decedent’s

principal purpose of avoiding U.S.

the total taxable gifts made after

taxable estate rather than on the

taxes. Be sure to see the instructions

December 1976, that are not included

receipt of any part of it.

for and then to answer Question 6 of

in the gross estate.

Cat. No. 63118N

Instructions For Form 706-Na - United States Estate (And Generation-Skipping Transfer) Tax Return - Internal Revenue Service - 2005

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