What are the tax implications for a non-US citizen receiving an inheritance?

I am a non-US citizen, but a permanent resident. What are the inheritance tax ramifications I would incur if my spouse who was a US citizen passed?

Estate Planning, International / Global, Taxes
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There are a couple of different estate tax ramifications associated with a surviving non-U.S. citizen spouse.

1. According to the IRS, "the Unlimited Marital Deduction is generally not available for property passing to a surviving spouse who is not a United States citizen." In other words, all the gifts you received from your spouse, which are over annual gift exclusion amount to a non-U.S. citizen ($149,000 for 2017) every year, plus his/her estate will be subject to the total applicable exclusion amount ($5,490,000 for 2017).

2. The Deceased Spousal Unused Exclusion election is also generally not available to a surviving spouse who is not a U.S. citizen. In other words, if the estate is below the total applicable exclusion amount ($5,490,000 for 2017), any remaining exclusion amount is not portable to you. 

3. In general, if the decedent owned property with a surviving spouse who is not a U.S. citizen, the total value of that property will be included in the estate unless you can prove the extent, origin, and nature of your interest in the property. 

Two ways may help you avoid the ramifications mentioned above. 

1. Become a U.S. citizen before the estate tax return due (usually 9 months after death plus 6-month extension).
2. Use the Qualified Domestic Trust (QDOT) if you already have one. 

I highly recommend you to consult a qualified estate attorney based on your specific situation. 
 

February 2017
February 2017
February 2017
February 2017