Certain deceased nonresidents who were not citizens of the United States are subject to U.S. estate taxation with respect to their U.S.-situated assets. For estate tax purposes, a citizen of a U.S. possession is not a U.S. citizen.
U.S.-situated assets that are subject to estate tax include, for example:
- Real estate located in the U.S.,
- Tangible personal property (excluding some art), and
- Stock of corporations organized in or under U.S. law, even if the nonresident held the certificates abroad or registered the certificates in the name of a nominee.
Examples of property treated as situated outside the U.S., and therefore not subject to the U.S. estate tax, include certain deposits and debt obligations described in Section 871(g)-(i), bank accounts deposited with a foreign branch of a domestic commercial banking business, and proceeds of life insurance on the life of a nonresident who is not a U.S. citizen.
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