As mentioned in this post, for the years 2011 and 2012, there is in effect a $5 million exemption from estate and gift tax. However, this benefit does not apply to everyone. If you are not a US citizen, you might not be able to take advantage of this tax benefit. In fact, foreigners, specifically non-resident aliens ("NRA") are limited to an estate and gift tax exemption of only $60,000.00. The IRS applies a test to determine where the non-US citizen considers his or her home or "domicile" to be. The determination of your domicile consists of an evaluation of a list of factors, including:
- Visa status,
- Location and value of other residences and real property,
- Location where family members and friends live,
- Location of personal property, especially those of value such as fine art, currency, cash, stocks, and bank accounts,
- Location of business interests,
- Location where registered to vote,
- Location where licensed to drive,
- Location of primary residence,
- Location intended for burial,
- Non-resident alien status.
The good news, however, for NRAs, is that the only assets subject to US gift and estate tax are those situated in the US.