IRS Form 706-NA – If you’re handling the estate of a nonresident alien who owned assets in the United States, understanding IRS Form 706-NA is crucial. This form, officially known as the United States Estate (and Generation-Skipping Transfer) Tax Return for the Estate of a Nonresident Not a Citizen of the United States, helps calculate and report estate taxes on U.S.-based property. With recent updates for decedents dying after December 31, 2024, staying informed ensures compliance and avoids penalties. In this SEO-optimized guide, we’ll cover everything from who needs to file to how to complete the form, drawing from official IRS resources.
What Is IRS Form 706-NA?
IRS Form 706-NA is specifically designed for estates of nonresident aliens (individuals who were neither U.S. citizens nor domiciled in the U.S. at the time of death) to compute estate tax and generation-skipping transfer (GST) tax liabilities on U.S.-situated assets. Unlike Form 706, which applies to U.S. citizens and residents, Form 706-NA focuses solely on property located in the U.S., such as real estate, stocks in U.S. companies, or tangible personal property physically present in the country.
The form ensures that the U.S. government taxes the transfer of these assets upon the decedent’s death, rather than the receipt by beneficiaries. It’s important to note that certain assets, like proceeds from life insurance on the decedent’s life or bank deposits not connected to a U.S. business, may be exempt from inclusion.
For the latest version, applicable to deaths after December 31, 2024, you can download the PDF directly from the IRS website: https://www.irs.gov/pub/irs-pdf/f706na.pdf. Accompanying instructions are available at https://www.irs.gov/pub/irs-pdf/i706na.pdf.
Who Must File Form 706-NA?
Not every nonresident alien’s estate requires this form. Filing is mandatory if the fair market value of the decedent’s U.S.-situated assets at death exceeds $60,000, after adding any gift tax specific exemptions for gifts made between September 9, 1976, and December 31, 1976, and adjusted taxable gifts made after December 31, 1976. The executor of the estate—typically appointed by the will or court—is responsible for filing.
Special considerations apply to:
- Expatriates: Individuals who relinquished U.S. citizenship or long-term residency after June 17, 2008, may still be subject to U.S. estate tax rules as nonresidents, potentially including Section 2801 taxes on bequests to U.S. persons.
- U.S. Territory Citizens: Those who acquired U.S. citizenship solely through birth or residence in a U.S. possession (like Puerto Rico) are treated as nonresidents for estate tax purposes.
- Treaty Beneficiaries: Estates under U.S. tax treaties with countries like Canada, the UK, or Germany may have modified rules, such as expanded deductions or exclusions.
If the estate’s U.S. assets fall below the threshold, no filing is needed, but consult the instructions for small estate relief options, especially under treaties like the U.S.-Canada agreement.
When and Where to File Form 706-NA?
The due date for Form 706-NA is nine months after the date of death. For example, if the decedent passed away on January 1, 2026, the form is due by October 1, 2026. You can request an automatic six-month extension by filing Form 4768 before the original deadline, but this doesn’t extend the payment due date—tax must be paid on time to avoid penalties.
File the form with the Internal Revenue Service Center in Cincinnati, OH, or use a Private Delivery Service (PDS) for timely postmarking. Electronic payments are encouraged via EFTPS, and refunds can be direct-deposited. Late filings incur penalties under Section 6651, starting at 5% per month, plus interest.
How to Calculate the Taxable Estate on Form 706-NA?
The taxable estate is determined by valuing U.S.-situated assets (gross estate in the U.S.) and subtracting allowable deductions. Here’s a high-level overview:
- Gross Estate in the U.S. (Part V): List all U.S.-located property, including real estate, U.S. corporate stocks, and tangible items. Use fair market value at death or elect alternate valuation (within six months) if it reduces tax liability. Attach appraisals and CUSIP numbers for securities.
- Deductions (Part IV): Prorate deductions like funeral expenses, administration costs, debts, and losses based on the ratio of U.S. assets to the worldwide estate. Charitable deductions require Schedule O from Form 706, and marital deductions are limited to U.S. citizen spouses or Qualified Domestic Trusts (QDOTs) via Schedule M.
- Tax Computation (Part II): Apply the unified credit (up to $13,000 for most nonresidents), gift tax credits, and any state death tax deductions. For GST tax, use Schedules R and R-1 if transfers skip generations.
| Key Component | Description | Relevant Schedule/Part |
|---|---|---|
| Gross Estate | Value of U.S. assets at death | Part V |
| Deductions | Prorated expenses, charitable/marital | Part IV, Schedules M/O |
| Credits | Unified ($13,000 max), gift taxes | Part II |
| GST Tax | On skips involving U.S. property | Schedules R/R-1 |
Recent Updates for 2026 Filings
The form was redesigned in August 2025 for efficiency, removing the Part III representation section (use Form 2848 instead) and adding direct deposit fields. No major threshold changes, but always check for inflation adjustments or treaty updates. For Canadian estates, exempt assets (like certain pensions) are excluded from Part V but included in computations.
Penalties for understatements can reach 40%, and basis consistency reporting via Form 8971 is required within 30 days of filing.
Common Attachments and Requirements
- Death certificate and will (certified copies).
- Appraisals for real estate or art.
- Prior gift tax returns (Form 709).
- State death tax certificates.
- Treaty statements if claiming benefits.
For complex estates, consult a tax professional familiar with international tax treaties.
FAQs About IRS Form 706-NA
What if the estate is below $60,000?
No filing required, but document the valuation for records.
Can I file electronically?
Currently, Form 706-NA must be paper-filed, but payments can be electronic.
How does GST tax apply?
It’s imposed on transfers skipping generations, but only on U.S. property; complete Schedules R/R-1 if applicable.
What about joint property?
Report U.S. joint tenancy assets on Schedule E from Form 706.
Navigating IRS Form 706-NA can be complex, but using the official instructions and consulting experts ensures accurate filing. For personalized advice, visit IRS.gov or contact a qualified tax advisor. Stay compliant to protect the estate’s value for beneficiaries.