Correction - A non US citizen Saudi Arabian estate tax

Hi David.

Only when there is a treaty rate available do nonresidents of the US get the
full 1,500,000 exemption for estates.

Saudi residents and most others only get a unified tax credit of $13,000.
That equates to an exemption of $60,000. Nonresidents are allowed to use the
alternative valuation date like citizens.

Also, every state has different rules for their state estate tax.

Regards;
Gary

Gary P Gauvin LLC
Tax Services
2500 Rochelle Rd
Rockwall TX 75032
Phone & Fax (469) 273-3399
[email protected]

Gary Gauvin, my old tax partner in Ottawa has sent a correction to my
Saudi Arabia estate question. Again, I was not thinking. Saudi, Grand
Cayman, Bahamian, etc citizens are still only given the exemption that
Canadians received up to November 1988 before the 1995 treaty was changed
retroactively.
Thanks Gary
david

QUESTION:

What are the rules 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

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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.

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.