QUESTION:
What are the rulles for a Saudi diplomat who passed away in the US leaving
three properties included in a will divided between a wife and two childern
(adults). Do they have to file for estate tax? if the answer is yes what
kind of percentage?
Thank You
I can also be reached @ 703 xxx-xxxx
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david ingram replies:
Diplomats stationed in the US are generally exempt from any form of US
taxation with the exception of tax on rentals and tax on Dividends.
In general, a Diplomat is considered a non-resident and not taxed on earned
income.
However, a Diplomat who is a non-resident who has investment property would
be taxable for estate purposes as any other non-resident would be.
The exemption for 2004 was $1,500,000 After that, the rates rise from a low
of 18% to a high of 55% of the estate. Since his wife is not a US citizen,
she does not get the benefit of unlimited tax free rollovers to her.
You need to consult an estate person in the city or state where the property
is located to determine the estate tax liability.
My associate, George Arora is a CPA, MBA with a Masters of Taxation as well.
However, dealing with us in this situation makes no sense to me.
The estate exemption is to rise to $3,500,000 by 2009 and be eliminated in
2010 but that does you no good at this time.
The following table shows the rates of Estate Tax:
The following rates of gift and estate tax apply:
Column A Column B Column C Column D
Rates of Tax
Taxable Taxable Tax on on excess Amount
amount amount in over amount
excess
-- 10,000 ---- 18%
10,000 20,000 1,800 20%
20,000 40,000 3,800 22%
40,000 60,000 8,200 20%
60,000 80,000 13,000 26%
80,000 100,000 18,200 28%
100,000 150,000 23,800 30%
150,000 250,000 38,800 32%
250,000 500,000 70,800 34%
500,000 750,000 155,800 37%
750,000 1,000,000 248,300 39%
1,000,000 1,250,000 345,800 41%
1,250,000 1,500,000 448,300 43%
1,500,000 2,000,000 555,800 45%
2,000,000 2,500,000 780,800 49%
2,500,000 3,000,000 1,025,800 53%
3,000,000 10,000,000 1,290,800 55%
10,000,000 21,040,000 5,140,800 60%
21,040,000 ---- 11,764,800 55%
The formatting above may not be correct. However you can find the original
by going to www.centa.com and clicking on US / Canada Income Tax on the
right hand side.
Note that the exemptions in the reference above have not been changed.
I also welcome any comments from other members of this list who may have
some insight that I have missed.
So stay tuned. I have added your name as well and if any of our other
experts have a contradictory opinion, they will let me know.
This from "ask an income tax and immigration expert" from www.centa.com
<http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or
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