- quote -

Agreed. However, an IRA is NOT a probate asset, and as
such, does not come under the control of the executor of the
estate. The IRA custodian does not have the same
responsibility that an executor has, and the custodian, to
my knowledge, cannot be held responsible for the unpaid
estate tax.

So what happens if the only asset of the estate is a very
large IRA, and the beneficiary takes it all? The IRS has
the right to go after the beneficiary, but if the
beneficiary is a foreign national, how does the IRS get
paid?

Barry Picker, CPA/PFS, CFP

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"Barry Picker" <bpickercpa[at]mindspring.com> wrote:

- quote -

My recollection is that it's the unlimited marital deduction
that is unavailable to non-citizens (unless a special type
of trust is used to make sure that estate tax is payed on
the death of the second spouse). I believe the unified
credit is available to anyone.

- quote -

Generally an executor or trustee is not allowed to make
payouts to beneficiaries until all taxes and other creditors
have been paid. For executors it's the probate court that
makes sure that the creditors are paid. For trusts, the
trustee could be held personally liable if there's not
enough left to pay creditors.

Stu

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- quote -

Good question. The executor of the estate could have a
problem. He/she may be able to freeze the account in order
to make sure the funds are there for the estate tax.
Otherwise, all of the other assets, the ones that the IRS
CAN get their hands on, are fair game for payment of the
estate tax.

Barry Picker, CPA/PFS, CFP

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- quote -

Also, what about estate taxes? Isn't the unified credit
unavailable when the beneficiary is non-US citizen?

(I imagine that the custodian is not responsible for this,
but how does Uncle Sam get the estate tax if the custodian
pays out?)

-HW "Skip" Weldon
Columbia, SC

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"Kirk Carpenter" <kirkc1[at]cox.net> wrote in news:vu617vr6h8h9d5

- quote -

The bene will have to get an ITIN and you will have to file
Form 1042 (if I remember correctly) and withhold tax on the
account before you distribute it. Check to see if there is a
treaty which might change the treatment.

Martha Matthews, EA

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"Kirk Carpenter" <kirkc1[at]cox.net> wrote:

- quote -

Tax withholding, unless the tax treaty holds differently.

Barry Picker, CPA/PFS, CFP

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How do you deal with the income tax consequences when an IRA
beneficiary is a foreign citizen? (Philippine citizen who
lives in the Philippines)

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