Estate Taxation for Foreign Nationals

For 2019, the estate of a U.S. citizen is allowed an exemption of $11,400,000 before the imposition of estate tax.  The U.S. citizen or domiciliary is subject to U.S. estate tax on the fair market value of all assets owned, wherever situated, at date of death.  This amount is reduced by the fair market value of worldwide mortgages, debts and administrative expenses of the decedent.  In addition, an unlimited marital deduction is allowed to the estate for property passing to the U.S. citizen surviving spouse.

In contrast, a foreign national is only subject to U.S. estate tax on certain U.S. situs assets.  However, instead of receiving an exemption of $11,400,000, the exemption for foreign nationals is $60,000.  In addition, the deduction for mortgages, debts and administrative expenses is limited based on the value of U.S. assets to worldwide assets.