A Guide To US Gift and Estate Tax For U.S. Expatriates
Are you worried about paying inheritance/estate/gift tax in the United States and your country of residence? In this guide, we’ll discuss what the inheritance tax is when it’s taxable and what tax obligation you might have in relation to inheriting an estate.
Losing a loved one is often an emotionally charged and complicated process. Things can get even more complicated by different laws and regulations if you’re inheriting property from someone who lives overseas or you reside abroad. It’s important to understand how US inheritance tax laws might impact you.
What Is An Inheritance? What is the Estate Tax?
The term “inheritance” refers to the transfer of wealth from a deceased person to his or her heirs. This includes real estate, stocks, bonds, cash, bank accounts, retirement plans, life insurance policies, etc. The estate tax is a state tax that you pay when you receive money or property from the estate of a deceased person.
What Is an Estate?
In the United States, a deceased person’s estate is a legal entity created after his/her passing. It is usually responsible for collecting the deceased person’s worldwide assets, paying off any outstanding debts, and distributing the rest among the deceased person’s beneficiaries. The estate includes everything the deceased person owned, whether real or personal property, tangible or intangible, anywhere in the world. The Estate tax is a tax on the estate (the property, money, and possessions) of someone who’s died.
How Much Can a U.S. Citizen Inherit Tax-Free?