The Importance of Filing IRS Form 706-NA: Estate Tax Return for Nonresident Decedent

Posted on 01-02-2023 12:11 PM

If you are the executor or personal representative of an estate for a nonresident decedent, it is important to understand the requirements for filing an estate tax return with the Internal Revenue Service (IRS). In this article, we will discuss the importance of filing IRS Form 706-NA, which is the estate tax return for nonresident decedents.

What is IRS Form 706-NA?

IRS Form 706-NA is the estate tax return for nonresident decedents. It is used to report the value of the decedent's estate and to determine the amount of estate tax that is due.

Who Must File IRS Form 706-NA?

The executor or personal representative of an estate for a nonresident decedent must file IRS Form 706-NA if the estate meets certain requirements. In general, an estate must file a return if the decedent was a nonresident of the United States at the time of death and the estate includes assets located in the United States.

What Assets Must Be Included in the Estate Tax Return?

The following assets must be included in the estate tax return:

Real estate located in the United States
Personal property located in the United States
Stocks and bonds issued by a U.S. corporation
Interest in a U.S. partnership
Bank accounts located in the United States
Life insurance proceeds paid to the estate

When Must IRS Form 706-NA Be Filed?

IRS Form 706-NA must be filed within nine months of the decedent's death. If an extension of time is requested, the return must be filed within the extended due date.

What Happens if IRS Form 706-NA is Not Filed?

If IRS Form 706-NA is not filed, the executor or personal representative may be subject to penalties and interest. In addition, the estate may be required to pay an estate tax that is larger than what is actually due.

How to File IRS Form 706-NA

Step 1: Gather Information

Before you start filling out the form, gather the following information:

The name and social security number of the decedent
The date of death and the place of death
A list of the assets included in the estate
The value of each asset
The name and address of the executor or personal representative

Step 2: Complete Part 1

In Part 1 of the form, you will provide information about the decedent and the executor or personal representative. This section requires the following information:

The name and social security number of the decedent
The date of death and the place of death
The name and address of the executor or personal representative

Step 3: Complete Part 2

In Part 2 of the form, you will provide information about the assets included in the estate. This section requires the following information:

A list of the assets included in the estate

The value of each asset
The basis of each asset

Step 4: Complete Part 3

In Part 3 of the form, you will calculate the estate tax due. This section requires the following information:

The value of the gross estate
The value of any deductions
The value of any credits
The amount of estate tax due

Step 5: Sign and Date the Form

The executor or personal representative must sign and date the form in the designated areas to certify that the information provided is true and accurate.

Step 6: Attach Required Documentation

The following documentation must be attached to the form:

A copy of the decedent's will
A copy of the decedent's death certificate
A list of all debts and expenses of the estate
A list of all bequests and distributions

Step 7: File the Form

Once the form is completed and all required documentation is attached, the form should be filed with the IRS. The form can be filed electronically or by mail. If filing by mail, send the form and all attachments to the following address:

Department of the Treasury

Internal Revenue Service Center

Cincinnati, OH 45999

Filing IRS Form 706NA is an important responsibility for the executor or personal representative of an estate for a nonresident decedent. Failure to file the form can result in penalties and interest and an increase in the amount of estate tax due. By following the steps outlined in this article, you can ensure that the estate tax return is filed correctly and on time.