Under current U.S. tax laws governed by the U.S. Department of Treasury’s Internal Revenue Service (“IRS”), there a varying estate tax implications, depending on your immigration status, and whether you are a “taxable resident” and your marital status.
As of Summer 2023, the U.S. estate tax exemption $12,920,000 for an individual or $25,840,000 million for a married couple. However, please note that tax laws can change, so it’s essential to verify with the latest information from the Internal Revenue Service (IRS) or a tax professional for the most current exemption amount.
The basic exemption amount for non-citizen individuals was significantly lower compared to U.S. citizens and residents. The exemption for non-citizens was $60,000, whereas U.S. citizens and lawful residents (Greencard holders) had a much higher exemption. — These Estate tax implications relate to assets held and located in the United States.
In the context of U.S. estate tax regulations, an individual is considered a “resident” if they meet the criteria for a U.S. resident for estate tax purposes. Generally, an individual is treated as a U.S. resident for estate tax purposes if they meet the substantial presence test. This test takes into account the number of days the individual is present in the United States over a certain period of time.
The substantial presence test involves a formula that considers the individual’s presence in the U.S. during the current year and the two preceding years. If the total exceeds a specific threshold, the individual is considered a U.S. resident for estate tax purposes.
It’s important to note that these rules can be complex, and there are exceptions and special circumstances that might apply. If you’re unsure about your residency status for estate tax purposes, it’s recommended to consult with a tax professional or legal expert who can provide personalized guidance based on your situation and the current tax laws.