International Estate Considerations Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 International Estate Considerations flashcards as text
A US citizen dies owning a vacation home in Mexico worth $800,000. Which US estate tax form is used, and is this property included?
Answer: Form 706; included as part of the worldwide gross estate
US citizens file Form 706, and their worldwide assets—including foreign real property—are included in the gross estate.
What is 'forced heirship' and how does it affect US estate plans with foreign assets?
Answer: A foreign law mandating minimum inheritance shares for certain relatives, overriding a will's instructions
Forced heirship laws in countries like France and many civil-law nations require reserved portions for children, potentially overriding a US decedent's will for locally sited assets.
A client holds shares in a foreign corporation that owns US real property. What US tax rule may cause the client to be treated as directly owning the underlying US real property?
Answer: The Foreign Investment in Real Property Tax Act (FIRPTA) look-through rules
FIRPTA look-through rules can treat interests in foreign corporations that own US real property as direct US-situs assets for estate tax purposes.
Which estate planning technique is commonly used to defer US estate tax when a non-citizen surviving spouse inherits a large estate?
Answer: Qualified domestic trust (QDOT)
A Qualified Domestic Trust (QDOT) allows the marital deduction for transfers to a non-citizen spouse by ensuring US estate tax is collected when distributions or upon the spouse's death.
Which country is NOT a party to a bilateral US estate and gift tax treaty as of 2026?
Answer: Canada
Canada does not have a bilateral US estate and gift tax treaty; instead, cross-border estate issues are addressed through the income tax treaty and domestic law.
A US client inherits a Swiss bank account from a foreign parent. What is the first compliance step the estate advisor should recommend?
Answer: Determine whether FBAR and FATCA reporting obligations are triggered
FBAR (FinCEN 114) and FATCA (Form 8938) reporting requirements must be evaluated before any other steps when a US person inherits foreign financial accounts.
When calculating US estate tax on a decedent's worldwide estate, a foreign death tax credit is available under IRC Section 2014. What is the primary limitation on this credit?
Answer: It cannot exceed the portion of US estate tax attributable to the foreign property
The IRC Section 2014 credit for foreign death taxes is limited to the lesser of the foreign tax paid or the US estate tax attributable to the same property.