A family member abroad has died and their U.S. bank froze the account. Do you need Form 706-NA?

For U.S. estate tax, residence means domicile: the place the decedent treated as their permanent home at death. It isn't about holding a green card or about income tax residency. A decedent who was neither a U.S. citizen nor domiciled in the U.S. is a "nonresident not a citizen" (NRNC) and owes U.S. estate tax only on U.S.-situated assets.

U.S. citizens and U.S.-domiciled individuals have a $15,000,000 exemption in 2026. A nonresident non-citizen gets a $13,000 unified credit, which shelters $60,000. That gap is why a parent overseas with a few hundred thousand dollars in a U.S. brokerage account can leave a sizable U.S. estate tax bill.

Cases that are easy to get wrong:

• A green card holder who moved back home years ago: their domicile may no longer be in the U.S. It's a facts-and-circumstances test (where they had a home, where family lived, where they intended to stay).
• A visa holder living in the U.S. long term: possibly a resident for income tax, but not necessarily for estate tax.
• A U.S. citizen living abroad: still files Form 706 as a citizen. Form 706-NA doesn't apply.

Included: U.S. real estate, tangible property located in the U.S., stock of U.S. corporations (wherever the certificates or the account are held), U.S. mutual funds, most debt issued by U.S. persons, and a U.S. business. Generally excluded: bank deposits not connected with a U.S. trade or business, debt that pays portfolio interest (such as U.S. Treasuries), and life insurance proceeds on the decedent's own life.

Example: a parent who was a Chinese citizen dies with $50,000 in deposits and a $300,000 U.S. stock account at Wells Fargo. The deposits are generally excluded, so U.S. assets are $300,000, above $60,000, and Form 706-NA is required. The tentative tax on $300,000 is $87,800; after the $13,000 unified credit, the tax is about $74,800 before any deductions.

The executor or administrator files Form 706-NA and pays the tax within 9 months of death. If no executor is appointed in the U.S., anyone holding or controlling the decedent's U.S. property is treated as the executor. Form 4768 gives an automatic 6-month extension to file, but the tax is still due at 9 months, with interest on anything unpaid.

Main attachments:

• The death certificate, and the will if there is one (a certified copy if possible);
• Date-of-death values for each U.S. asset (bank and brokerage statements or valuation letters, a real estate appraisal);
• To deduct funeral costs, administration expenses or debts, the worldwide estate must be disclosed; deductions are prorated by the share of U.S. assets in the worldwide estate;
• English translations of every document in another language.

Without a treaty, a Chinese decedent only gets the $60,000 exemption. Treaty countries (the IRS lists Australia, Austria, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, South Africa, Switzerland and the UK) may get a larger, prorated credit or exempt some assets, with Form 8833 and a copy of the estate tax return filed in the treaty country attached.

Property passing to a surviving spouse who is a U.S. citizen can be deducted; for a non-citizen spouse, the deduction requires a qualified domestic trust (QDOT).

A transfer certificate (Form 5173) is an IRS document confirming that the estate's U.S. estate tax has been paid or isn't owed. U.S. banks, brokers and transfer agents usually ask for it before moving a nonresident decedent's assets to the heirs; without it the assets stay frozen.

Practical points:

• Deposit-only accounts often need IRS paperwork too. Deposits generally aren't in the U.S. estate, but many banks still require a transfer certificate or the IRS letter under their own policies.
• Don't file Form 706-NA when it isn't required. The IRS says an unnecessary Form 706-NA delays the transfer certificate.
• Property administered by an executor appointed and acting in the U.S. doesn't need a transfer certificate, but that means U.S. probate, with its own time and legal fees.
• Authenticating foreign documents. Banks generally want the death certificate, the will and proof of who may act for the estate. Documents issued abroad usually need notarization and an apostille. Mainland China has used the Apostille Convention since November 7, 2023, so consular legalization is no longer needed.

• Heirs who are U.S. tax residents and receive more than $100,000 in a year in gifts and bequests from foreign persons (including a foreign estate) report it on Form 3520. There's usually no tax on it (see our guide on foreign gifts and Form 3520).
• Inherited assets get a basis equal to their value at death (IRC §1014), so selling soon after inheriting usually produces little capital gain.
• Foreign heirs who later sell inherited U.S. real estate face FIRPTA withholding (see our FIRPTA guide).
• If the decedent had U.S.-source income in the year of death (dividends, for example), a final-year Form 1040-NR may be due.

Keep every letter and form the bank or broker sent, list each account with its date-of-death value, and work out which path applies.

• Situation A: you just received the bank's letter. List each U.S. account's type and date-of-death balance or value and check whether U.S. assets exceed $60,000. Start gathering the death certificate, will and inheritance documents, with translations, notarization and apostilles.
• Situation B: U.S. assets exceed $60,000 and you're within 9 months. Prepare and file Form 706-NA and arrange payment from the estate (some institutions can pay the IRS directly from the frozen account; confirm with them). If you can't finish in time, file Form 4768 within 9 months and pay an estimate.
• Situation C: more than 9 months have passed. File Form 706-NA as soon as possible; penalties follow IRS rules, and if there was reasonable cause you can ask for relief after the penalty notice arrives.
• Situation D: U.S. assets are $60,000 or less. Don't file Form 706-NA. Prepare the affidavit and documents under the IRS's Part B instructions, fax them, and give the bank the transfer certificate or IRS letter once it arrives.