Instructions for Form 706-NA (Revised September 1999) United States Estate (and Generation-Skipping Transfer) Tax Return Estate of nonresident not a citizen of the United States (To be filed for decedents dying after December 31, 1997.) Section references are to the Internal Revenue Code unless otherwise noted. Department of the Treasury Internal Revenue Service Form 706.   In order to complete this return, you must obtain Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and its separate instructions. You must attach schedules from Form 706 if you intend to claim a marital deduction, a charitable deduction, a qualified conservation easement exclusion or a credit for tax on prior transfers, or if you answer “Yes” to question 5, 7, 8, 9, or 11 in Part III. You will need the instructions to Form 706 to explain how to value stocks and bonds. Make sure that you obtain the revision of Form 706 that is applicable for the date of the decedent's death. General Instructions Purpose of Form Form 706-NA is used to compute estate and generation-skipping transfer (GST) tax liability for nonresident alien decedents.   The estate tax is imposed on the transfer of the decedent's taxable estate rather than on the receipt of any part of it. TIP For information about transfer certificates for U.S. assets, write to the Internal Revenue Service, Estate Tax Group, 950 L'Enfant Plaza, SW, Washington, DC 20024. Definitions The following terms are used often in these instructions: l  The United States means the 50 states and the District of Columbia. l  A nonresident alien decedent means a decedent who is neither domiciled in nor a citizen of the United States at the time of death.   For purposes of this form, a citizen of a U.S. possession is not a U.S. citizen. l  A U.S. expatriate generally is one who lost U.S. citizenship within 10 years before the date of death, and for whom a principle purpose in doing so was to avoid U.S. taxes. This also applies to certain long-term residents (as defined in section 877(e)) of the United States who lost residency on or after February 6, 1995. If the decedent's average annual net income tax liability or net worth exceeds certain limits, the decedent is presumed to have a principle purpose of avoiding U.S.   taxes (section 877(a)). The executor has the burden of proving otherwise. Be sure to see the instructions for and then to answer Question 6 of Part III. Who Must File The executor must file Form 706-NA if the date of death value of the decedent's gross estate located in the United States under Internal Revenue Code situs rules exceeds the filing limit. The filing limit is $60,000 reduced by the sum of: (1) the gift tax specific exemption (section 2521) allowed with respect to gifts made between September 9, 1976, and December 31, 1976, inclusive, and (2) the total taxable gifts made after December 1976, that are not included in the gross estate. The executor is the personal representative, executor, executrix, administrator, or administratrix of the deceased person's estate. If no executor is appointed, qualified, and acting in the United States, every person in actual or constructive possession of any of the decedent's property must file a return. If more than one person must file, it is preferable that they join in filing one complete return. Otherwise, each must file as complete a return as possible, including a full description of the property and each person's name who holds an interest in it. When To File File Form 706-NA within 9 months after the date of death unless an extension of time to file was granted. In that case, attach a copy of the approved Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Tax. Where To File Send Form 706-NA to the Internal Revenue Service Center, Philadelphia, PA 19255. Penalties The law provides for penalties for both late filing of returns and late payment of tax unless there is reasonable cause for the delay. There are also penalties for valuation understatements that cause an underpayment of tax and for a willful attempt to evade or defeat payment of tax. Death Tax Treaties Death tax treaties (or, for Canada, an income tax treaty protocol with death tax provisions) are in effect with the following countries: If you are reporting any items on this return based on the provisions of a death tax treaty or protocol, you may have to attach a statement to this return disclosing the return position that is treaty based. See Regulations section 301.6114-1 for details. Specific Instructions Attachments If the decedent died testate, attach a certified copy of the will to Form 706-NA. If you are unable to obtain a certified copy, attach a copy of the will and explain why it could not be certified. For closely held or inactive corporate stock, attach the balance sheets, particularly the one nearest the valuation date, and statements of the net earnings or operating results and dividends paid for each of the 5 preceding years. Attach any other documents, such as appraisal lists, needed for explanation. Also attach copies of all available U.S. gift tax returns the decedent filed. Other documents may be required as explained in these instructions. Attach an English translation to all documents in other languages. Australia Italy Austria Japan Canada Netherlands Denmark Norway Finland Republic of South Africa France Sweden Germany Switzerland Greece United Kingdom Ireland Cat. No. 63118N