The Internal Revenue Service has published new regulations effective August 22, 1995 which cover gift and estate taxes applicable to non-US citizens. The regulations contain the following new rules:
- a restriction on the deduction of estate and gift taxes where a spouse transfers funds to a non-US citizen spouse either through inheritance or a gift
- the annual exclusion for gifts transferred to a non-US citizen spouse has been increased to 0,000
- the tax rate and the “unified credit” amount for estates of nonresident, non-US citizen decedents has been changed
- new rules regarding “protective elections” for passing property to a non-US citizen spouse and for conforming marital trusts and non-marital transfers to “qualified domestic trusts” were also added
For more information on the new rules, you are advised to consult with a tax attorney.
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