I'm not a US person but own US stocks — is the estate tax exemption really only $60,000?
Yes — it really is that small. A nonresident alien (someone who is neither a U.S. citizen nor a U.S. tax resident at death) gets only a $60,000 exemption against U.S.-situs assets, delivered through a $13,000 unified credit under IRC Section 2102(b). Compare that with the $15 million lifetime exemption for U.S. citizens and residents in 2026, and the gap is enormous. Anything above $60,000 of U.S.-situs assets is taxed at graduated rates from 18% to 40%.
How the $60,000 works
The mechanics are simple but harsh:
| Step | Rule |
|---|---|
| 1. Identify U.S.-situs assets | U.S. real estate, stock of U.S. corporations, and cash in a U.S. brokerage account count; deposits at a U.S. bank and most directly held U.S. Treasury bonds generally do not |
| 2. Subtract the exemption | The $13,000 unified credit offsets the tax on the first $60,000 — estates at or below $60,000 owe nothing |
| 3. Apply the rate table | The same graduated schedule used for U.S. estates: 18% at the bottom, rising to 40% on amounts above $1 million |
| 4. File if over $60,000 | The estate files Form 706-NA when U.S.-situs assets exceed $60,000 |
The rate schedule (from the IRS Form 706 instructions, Table A):
| Taxable amount over | Not over | Tax on lower amount | Rate on excess |
|---|---|---|---|
| $0 | $10,000 | $0 | 18% |
| $10,000 | $20,000 | $1,800 | 20% |
| $20,000 | $40,000 | $3,800 | 22% |
| $40,000 | $60,000 | $8,200 | 24% |
| $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 | — | $345,800 | 40% |
So $500,000 of U.S.-listed shares left by a nonresident would face roughly $142,800 of tax before deductions — not a flat 40% on everything, but painful all the same.
The treaty exception
The United States has estate-tax treaties with only a handful of countries. Where one exists, it can raise the effective exemption substantially — the U.S.–Canada treaty, for example, effectively gives Canadian residents protection up to the U.S. citizen-level exemption. Check whether your country of domicile has one; most do not.
Common ways families reduce the exposure
- Hold U.S. equities through non-U.S.-domiciled funds (for example, Ireland-domiciled ETFs) instead of holding U.S. shares directly — shares of a non-U.S. fund are generally not U.S.-situs assets.
- Keep cash in U.S. bank deposits rather than a brokerage sweep account where possible.
- Consider lifetime gifts: gifts by a nonresident alien of non-U.S. property are generally not subject to U.S. gift tax.
- For a non-citizen surviving spouse, the marital deduction generally requires a Qualified Domestic Trust (QDOT) — and it defers the tax rather than eliminating it.
- Get cross-border estate advice before restructuring; a wrong move can create income-tax costs larger than the estate-tax saving.
Frequently asked questions
Do U.S. stocks held in my home-country brokerage still count?
Yes. Situs depends on the asset, not the account: stock of a U.S. corporation is U.S.-situs even if your broker is abroad.
What about my U.S. rental property?
U.S. real estate is U.S.-situs property, squarely within the tax — and the rental net-election described in our rental article helps with income tax, not estate tax.
Is the $60,000 indexed for inflation?
No. It has been $60,000 for decades, which is why it covers less real-world value every year.
Sources
- Entry source: https://us-wealth-guide.com/2026-exit-tax-renunciation-guide/
- Detailed rate analysis: https://www.taxesforexpats.com/articles/non-us-citizens/nonresident-alien-estate-tax-exemption-us-situs-assets.html
- https://www.bogleheads.org/wiki/Nonresident_alien_taxation