6. Description of property.—The description of property under
schedule A should be such that the property may be readily iden-
tified. Descriptions of stocks should include number of shares,
whether common or preferred, and, if preferred, what issue thereof,
par value, quotation at which returned, exact name of corporation,
and, if the stock is unlisted, the post office address of the principal
business office, the State in which incorporated and the date of
incorporation. If a listed security, state principal exchange upon
which sold. Descriptions of bonds should include number, principal
amount, name of obligor, date of maturity, rate of interest, date or
dates on which interest is payable, series number where there is
more than one issue, the exchange upon which listed, or the prin-
cipal business office of the corporation, if unlisted. For the rules to
be followed in valuing stocks and bonds, see the Estate Tax Regu-
lations and Form 706, Schedule B, Instruction 3.

Jointly owned property and property held as tenant by the
entirety should be identified as such, and the entire value thereof
should be disclosed in the column of schedule A headed “Descrip-
tion of property.” The right to include less than the full value of
the entire property for purposes of the tax must be supported by
proof. See subparagraph (a) of section 3 of these instructions.

7. Date of valuation of property.—Unless election is properly
made at the time the return is filed, to adopt the alternate valuation
authorized by section 2032 of the Code, all property must be valued
as of the date of the decedent's death. _In such case the information
indicated by the columns of schedule A headed “Subsequent valu-
ation date’ and “Alternate value” should not be shown, and the
space in such columns may be utilized for descriptive matter.

If the person filing the return elects to adopt the valuation author-
ized by section 2032 of the Code, such election must be expressly
indicated in the space provided under schedule A, and the return
must be timely filed. If such election is made, (1) any property dis-
tributed, sold, exchanged, or otherwise disposed of within 1 year
after the decedent's death must be valued as of the date of such
distribution, sale, exchange, or other disposition, whichever first
oceurs, and (2) any property not distributed, sold, exchanged, or
otherwise disposed of within such l-year period must be valued as.
of the date 1 year after the date of the decedent's death. The elec-
tion, if exercised, must be applied to all property included in the
gross estate on the date of the decedent's death. In such case ali
columns of schedule A should be filled in.

8. Deduction of administration expenses, clairhs, etc.—
Deduction may be taken of the proportion of the following expenses,
claims, etc., that the value of the part of the gross estate situated in
the United States bears to the value of the entire gross estate wher-
ever situated: (1) Funeral expenses; (2) administration expenses;
(3) claims against the estate; (4) unpaid mortgages and other liens;
and (5) losses incurred during the settlement of the estate arising
from fires, storms, shipwrecks, or other casualties, or from theft, if
such losses are not compensated for by insurance or otherwise.

It is immaterial whether the amounts to be deducted were incurred
or expended within or without the United States. However, no de-
duction whatever may be taken unless the value of the entire
gross estate wherever situated, as described in section 3 of these
instructions, is entered at item 3 of schedule B. The entire
gross estate must be valued as of the date of the decedent's death;
or, if the alternate valuation is adopted under schedule A, such
alternate valuation must be applied to the entire gross estate.
Adequate proof in support of items 3 and 4 of schedule B must
be submitted; otherwise, this deduction will be disallowed.
For this purpose there should be submitted a certified copy
of the foreign death tax return; or, if no such return was filed,
a certified copy of the inventory of the estate, together with the
schedule of debts and charges, filed in conjunction with the
administration proceedings of the estate or with the foreign
court of probate jurisdiction. Additional proof may be required
in specific cases.

The total amount of expenses, claims, etc., should be entered as
item 4 of schedule B, which entry must be supported by an item-
ized schedule. Such schedule should show the exact nature and
amount of each expense or claim as well as the name of the creditor.
Other deductions must be fully described and, if relating to partic-
ular property, the property must be identified. Death taxes, taxes
‘on income received after death, and property taxes not accrued
prior to death are not to any extent deductible. If a claim against
the estate or a mortgage is founded upon a promise or agreement,
the amount included in item 4 must be limited to the extent to which
the liability was contracted bona fide and for an adequate and full
consideration in money or money's worth. Deduction may be taken
for a mortgage only if the value of the property undiminished by the
amount of indebtedness secured by the mortgage is included in the
entire gross estate wherever situated. Except as otherwise provided
in section 2053 of the Code, the amount of deductions entered in
item 4 must not exceed the value of the property included in the
entire gross estate wherever situated, which is subject to claims.

9. Exemption.—Except as ctherwise stated herein, an exemp-
tion of $2,000 is authorized for the purpose of determining the tax-
able estate, and should be entered at item 6 of schedule B, An
increased exemption, referred to as the “prorated exemption” is
allowable (a) in the case of a decedent who was a citizen of the
United States and who was a resident of a United States possession,
as referred to in the last sentence of instruction 1, and (jb) in cases
where the provisions of a death tax convention apply to the estate
of a decedent who was a citizen of or domiciled in Australi
Norway or Switzerland, a resident of Finland, was domi.
in France, was a subject of or domiciled in Greece, was
a national of or domiciled in Italy, or in a case where a
beneficiary was domiciled in Japan.’ The prorated exemption
is computed at item 6 of schedule B. This increased exemption
will be disallowed unless the value of the entire gross estate
wherever situated is entered at item 3 of schedule B and sup-
ported by adequate proof, as explained in the second paragraph
of section 8 of these instructions. If the decedent was domiciled in
Canada, see section 10.

10, Convention with Canada.—Our present convention with
Canada exempts from Federal estate tax certain estates of nonres-
ident alien decedents who were domiciled in Canada and died
after December 31, 1958. The convention also contains a provi-
sion preventing the estate tax from reducing below $15,000 the
value of the estate of such a decedent which is subject to tax. If
the value of the taxable estate, before allowance of the specific
exemption of $2,000, does not exceed $15,000, the estate is
exempt from estate tax. If the value, before allowance of the spe-
cific exemption is less than $15,932.59, the gross tax (item 2, page 1)
is equal to the amount in excess of $15,000, For example, if the
value is $15,500, the gross tax on the taxable estate is $500. If
the value of the taxable estate before allowance of the specific
exemption is more than $15,932.58, the estate tax is to be calcu-
lated by the use of the “Table for computing estate tax” after
allowance of the specific exemption. The prorated exemption (item
6, schedule B) is not allowable under our present convention with
Canada, but may be allowable in cases where the prior convention
is applicable.

11. Computation of tax.—Except as provided in section 10
relating to Canada, the taxable estate, as shown at item 8 of
schedule B, should be carried forward to item 1 of the ‘‘Compu-
tation of tax.” The person filing the return should compute the
tax on the taxable estate in accordance with the “Table for com-
puting estate tax," and should enter such amount of tax at item 2
and, unless credit is claimed, also at item 4. This latter amount
should be paid to the director.

12. Credit for estate, inheritance, legacy, or succession taxes
paid to a State, or the District of Columbia.—The States and
the District of Columbia generally impose inheritance or other
death taxes. If such taxes are paid in respect of property included
in_schedule A, credit therefor may be taken at item 3 of the
“Computation of tax.’ No credit is allowed where the taxable
estate does not exceed $40,000. If the taxable estate exceeds
$40,000 but does not exceed $90,000, the credit is limited to eight-
tenths of one percent (.008) of the amount by which the taxable
estate exceeds $40,000. If the taxable estate exceeds $90,000
but does not exceed $140,000, the credit is $400 plus one and
six-tenths percent (.016) of that portion of the taxable estate in
excess of $90,000 but not in excess of $140,000, For computation
of the credit in case the taxable estate exceeds $140,000, see Estate
Tax Regulations. The credit is also limited to such taxes as were
actually paid and credit therefor claimed within 4 years after the
filing of the return, except as otherwise provided under special
circumstances. For allowance of the credit, a certificate of the
proper officer of the taxing State, showing the information required
by the Estate Tax Regulations, must be submitted. If practicable
such certificate should be filed’ with the return, but if that is not con-
venient or possible, then it should be submitted as soon thereafter as
practicable.

13, Supplemental documents.—If the decedent died testate, a
certified copy of the will must be filed. In the case of closely held
or inactive stock of a corporation, there must be submitted balance
sheets, particularly the one nearest the valuation date, and state-
ments of the net earnings or operating results and dividends paid
for each of the five preceding years. Any other documents, such
as appraisal lists, required for an adequate explanation should be
filed with the return. Other supplemental documents may be
required as explained in sections 8 and 9 of these instructions.

14. Declarations.—If there is more than one executor or ad-
ministrator, all should verify and sign the return. In addition to the
declaration of the person filing the return, if the return was prepared
by another, the declaration also should be signed by the person
preparing the return.

USS. GOVERNMENT PRINTING OFFICE : 1965—O-787-753


x 106NA
rer. Tan, 1965) UNITED STATES Do not write in this space

: CDEPRREENT NONRESIDENT ALIEN ESTATE TAX RETURN
internal Revenue Serv
All amounts must The return must under certain circumstances be filed on Form 706 instead
be expressed in of this form. For details see section 2 of instructions.
United States dollars. |"Doccdonrs namo

Date of death | Social security number of decedent, if any

Residence (domicile) at time of death

Citizenship (nationality) at time of death Date and place of birth Business or occupation
Names of persons filing return Designations CExacutat, administrator, beneficary, Mailing address (Number, street, city, State, and postal ZIP code)

If the answer to question 6, 7, or 8 is “Yes,” use of this form is inappropriate, and the return should be made on Form 706,

la. Did the decedent die testate? O ves C) NO 6. Did the decedent make any transfer within 3
b. Were letters testamentary or of administra- years before his death of a value of $1,000 or
tion granted for the estate? O yes DNo more, or any transfer during his lifetime of a

value of $5,000 or more, without an adequate
Hf granted to persons other than those filing the and full consideration in money or money's

worth, any part of which was situated in the

2 Did the  Gecedent, at the time of his death, United States either at the time of fransler or g O
a. Real property located in the United States? C} Yes [JNO “vine time of the decedent's dsalh? ves CN
b. Stocks of United States corporations? Clves [no * ere, snore se eestence. Gt the wie ot he

©. Bonds, certificates, checks, bills, or notes during his lifetime, any part of the property

physically located in the United States? O ves Ono Sree oe citeated ie uke Unnen Sree
d. Debts owing by persons resident in the either when the trust was created or at the
United States or by United States corpora- Oves C1no time of the decedent's death? 0 yes (1) No
tions? . : :
€. Other property situated in the United States? [] YES [JNO 84» Did the decedent, at the time of his death,
3. Was the decedent engaged in business in the property any part of which was situated in
United States at date of death? O ves Ono Bhs United States? Oyves Ono

4. Did the decedent at date of death personally

Or, at any time, exercise or release such a

or through an agent have access to a safe
deposit box in the United States? Olyes Ono power? O ves (No

5. Did the decedent, at the time of his death, own (NOTE.—A general power of appointment means any power of
any property situated in the United States asa appointment exercisable in favor of the decedent, his estate, his
joint tenant or as a tenant by the entirety creditors, or the creditors of his estate, and includes the right of a
with right of survivorship or with his spouse beneficiary to appropriate or consume the principal of a trust. See
as community property? O yes (1) No Estate Tax Regulations for complete definition.)

Computation of tax (see sections 10, 11, and 12 of instructions)
1. Taxable estate (item 8, schedule B)
2. Gross tax on taxable estate (use “Table for computing estate tax,
3. Credit for State death taxes
4. Net estate tax payable (item 2 minus item 3) : : $

Under penalties of perjury, I declare that this return, including the additional sheets attached, if any, has been examined by me,
and to the best of my knowledge and belief, is a true, correct, and complete return. It is understood that a complete return requires the
listing herein of all the property constituting the part of the decedent's gross estate (as defined by the Statute) situated in the United States.

but see section 10) ..

Date

Date

Date

(Gignature(s) of person(s) filing return)

Date

(Signature of person preparing return)

Form 706NA (Rev. 1-65)


SCHEDULE A—Gross Estate in the United States (see sections 3, 4, 5, 6, and 7 of instructions)

Is election hereby made to have the gross estate of this decedent valued in accordance with values as of a date or dates subsequent to
the decedent's death as authorized by section 2032 of the Internal Revenue Code? [] YES NO[] (This election cannot be exercised
unless it is shown upon the return and the return is timely filed. The information in columns (c) and (d) should not be furnished unless the
reply to this question is "Yes."’)

@ (O} oO @ 0)
tem No. Complete description of property Subsequent valuation date | Alternate value Malus at date of death
$ $
(it more spi is needed, attach additional sheets of same size)
Total_I$ $

SCHEDULE B—Toxable Estate (see sections 8, 9, and 10 of instructions)

The value to be entered for item 2 includes real property situated outside of the United States if required to be included in the gross
estate by section 3 of the instructions. If adequate proof in support of items 2 and 4 is not submitted, deduction at item 4 will not be allowed.
Tf adequate proof in support of item 2 is not submitted, deduction at item 6 will be limited to $2,000. See section 9 of instructions for circum-
stances under which “prorated exemption” will be allowed. If decedent was domiciled in Canada and died after December 31, 1958,
see section 10 of instructions regarding special exemption and tax computation. If prorated exemption is claimed under Japanese
treaty, the numerator of the fraction set forth in item 6 is the value of the property situated in the United States and the subject of tax by both
the United States and Japan.

1, Gross estate in the United States (total, schedule A) ..

2. Gross estate outside the United States............seeeeeereeeeeeeeeeee PEPeESEESSePETTSTee reer eee e arrests

3. Total gross estate wherever situated (item 1 plus item 2) .........0seeeeeee eee eee eeeeee esse ee eee eee eens S$

4. Amount of funeral expenses, administration expenses, debts of decedent, mortgages and liens, and losses during
administration (attach itemized schedule) .

5. Deduction of expenses, claims, etc. (that proportion of item 4 that item 1 bears to item 3)

6. Exemption of $2,000 (in estates qualifying for “prorated exemption,” use $2,000 or fem x $60,000, whichever

is the greater) ..
1. Total deductions (item 5 plus item 6) ..........--

8. Taxable estate (item 1 minus item 7).

GENERAL INFORMATION

a. Time and place for filing return.—The return is due 15 TABLE FOR COMPUTING ESTATE TAX
months after the date of the decedent's death. The return must be or rates of tax on taxable estates exceeding $500,000, see the
filed with the Director of International Operations, Internal Reve- state Tax Regulations.)

nue Service, Washington, D. C., 20225. w (By | Rate of x on
Taxable estate | Taxableestate | Tex gnameunt | excess over
equaling— | not exceeding— | Spount in

b, Payment of tax.—The tax is due 15 months after the date of |
the decedent's death, and must be paid within such period unless Poraant

an extension of time for payment thereof has been granted by the 3
Director. Check or money order in payment of the tax should be a
made payable to “Internal Revenue Service.” u
22

c. Penalties.—Severe penalties are p~ vided by law for willful 50.000 2
failure to make and file a return on tim —_d for willful attempt to 100,000 30
250.000 32

evade or defeat payment of tax.



Instructions for United States Nonresident Alien Estate Tax Return, Form 706NA

1, General.—The United States estate tax is imposed by chapter
Il of the Internal Revenue Code. It is imposed upon the transfer
of the taxable estate of the decedent and not upon the receipt of any
particular legacy, devise, or distributive share.

The first step in the determination of tax liability in the case of a
nonresident alien is to ascertain the entire gross estate wherever
situated (see section 3 hereof). The second step is to determine the
part of such gross esiate situated in the United States, which
should be set forth in schedule A (see sections 4, 5, 6, and 7
hereof). The third step is to determine the amount of the deductions
authorized, the total of which should be entered as item 7 of sched-
ule B and subtracted from the part of the gross estate situated in
the United States in order to arrive at the taxable estate (see sec-
tions 8 and 9 hereof). The fourth step is to compute the tax and
any allowable credit (see sections 10, 11, and 12 hereot).

Reference herein to the deceased person’s residence generally
means the deceased person’s domicile, and the expression non-
resident alien refers to a decedent who at the time of his death
was neither domiciled in nor a citizen of the United States and toa
decedent who acquired United States citizenship solely by reason
of his connection with a United States possession.

2. Requirement of return.—An estate tax return must be filed
for the estate of a nonresident alien if the part of his gross estate (as
defined by the Estate Tax Statute) situated in the United States
exceeded a value of $2,000 at the date of death.

If there is no executor or administrator appointed, qualified, and
acting in the United States, every person in actual or constructive
possession of any property of the decedent is liable for the filing of
the return. If two or more persons are liable for the filing of the
return, it is Preferable for all to join in the filing of one complete
return, but if they are unable to join in making one complete return,
each is required to file a return disclosing all the information he has
in the case, including the name of every person holding an interest
in the property and ¢ full description of such property.

This form (Form 706NA) should, except as hereinafter provided, be
used in making the return. However, the return must be made on
Form 706 instead of this form under any of the following circum-
stances:

(a) If the decedent made any transfer within 3 years before his
death of a value of $1,000 or more, or any transfer during his
lifetime of a value of $5,000 or more, without an adequate and full
consideration in money or money's worth, any part of which was
situated in the United States either at the time of the transfer or at
the time of death;

(b) If there were in existence at the time of the decedent's
death any trusts created by him during his lifetime, any part of
the property of which was situated in the United States either at
the time the trust was created or at the time of death;

(c) If the decedent, at the time of his death, possessed a general
power of appointment over property situated in the United States
or, at any time, by will or otherwise, exercised or released such a

wer. For definition of a general power of appointment, see

state Tax Regulations;

(a) If a deduction is taken for the value of property of the gross
estate transferred by the decedent for public, religious, charita-
ble, scientific, literary, or educational purposes to corporations
or associations created or organized in the United States or to
trustees for use within the United States;

(e) If credit is taken for United States gift tax paid by or on
behalf of the decedent in respect of property included in the part
of the gross estate situated within the United States;

(®) If credit is taken for United States estate tax paid in con-
nection with the transfer of property to the decedent from a
transferor who died within a period of 10 years before or 2
years after the decedent; and

(g) If the decedent was domiciled in France or a subject of or
domiciled in Greece and a prorated allowance authorized by
treaty extends beyond the exemption, such as a prorated deduc-
tion for a bequest to a foreign charity.

8. Entire gross estate wherever situated.—The entire gross
estate wherever situated in the case of a nonresident alien is made
up in the same way as the gross estate of a citizen or resident. For
decedents dying after October 16, 1962, it includes real property
situated outside of the United States, unless the decedent's death was
after October 16, 1962, and before July 1, 1964, and (i) the dece-
dent's interest in the foreign real property was acquired before
February 1, 1962, or (ii) the decedent's interest in the foreign real
property was acquired after January 31, 1962, but the donor or prior
decedent from whom the decedent's interest was acquired had ac-
quired such prior interest before February 1, 1962. (The gross
estate of decedents dying before October 17, 1962, does not include
real property situated outside of the United States.) See Section
20.2031-1, Estate Tax Regulations, for details. With this excep-
tion, the gross estate embraces not only all property beneficially
owned by the decedent, but also includes:

(a) All property in which the decedent had at the time of his
death an interest either as a joint tenant or as a tenant by the

entirety, with right of survivorship. (The full value of the property

must be included in the gross estate, unless it can be shown that

a part of the property originally belonged to the other tenant or

tenants and was never received or acquired by the other tenant

or tenants from the decedent for less than an adequate and full
consideration in money or money's worth);

(b) Property held by the decedent and surviving spouse as
community property to the extent of the decedent's interest in
such property under the applicable law of the State, or posses-
sion of the United States, or of the foreign country;

(c) Dower or curtesy of the surviving spouse and all interests
created by statute in lieu thereof;

(d) Proceeds of insurance on the decedent's life, including, with
some exceptions, proceeds receivable by beneficiaries other than
the estate;

(e) Several classes of transfers made by the decedent prior to
his death, without an adequate and full consideration in money
or money's worth;

(£) Property with respect to which the decedent (1) possessed a
general power of appointment at the time of his death or (2) exer-
cised or released (in a specified manner) a general power of
appointment during his lifetime; and

(g) Certain annuities received by a beneficiary by reason of
surviving the decedent.

In the case of a nonresident alien decedent who was not
engaged in business in the United States at the time of his
death, obligations of the United States issued before March 1 1941,
are not to be included in that part of the gross estate which is listed
in schedule A. However, such obligations of the United States are
included in the entire gross estate wherever situated.

Further information concerning annuities, life insurance, transfers
during life, and general powers of appointment is set forth in the
Estate Tax Regulations and in the instructions on Form 706.

4. Property situated in the United States.—The part of the
gross estate situated within the United States should be listed in
schedule A. The term “United States,’” when used in a geographical
sense, includes only the fifty States, and the District of Columbia.
Property transferred during the decedent's life, and includible in the
entire gross estate wherever situated, is deemed situated within the
United States if such property was so situated either at the time of
the transfer or at the time of death.

Except as provided otherwise by treaty (see list below), the follow-
ing rules are applicable in determining whether property is situated
in the United States:

(a) Real estate and tangible personal property are within the
USS. if physically located therein.

(b) Irrespective of where the stock certificates are physically
located, (1) stocks of corporations organized in or under the laws
of the U.S. constitute property within the U.S., and (2) stocks of
all other corporations constitute property outside the U.S.

(c) Other written evidences of intangible property which are
treated as being the property itself, such as corporate or other
bonds, are property situated in the U.S. if physically located
therein.

(d) Intangible personal property, the written evidence of which is
not treated as being the property itself, such as a simple debt
or open account, constitutes property within the U.S. if consisting
of a property right issuing from or enforceable against a resident
of the U.S. or a domestic corporation (public or private).

(e) Proceeds of insurance on the life of a nonresident alien
decedent are not situated within the U.S.

(® Moneys deposited with any person carrying on the banking
business, by or for a nonresident alien decedent who was not
engaged in business in the U.S. at the time of his death, are not
situated within the U.S.

(g) For situs of works of art, owned by a nonresident alien, which
were imported into the U.S. for exhibition purposes, see Estate
Tax Regulations.

8. Death duty conventions are in effect with each of the coun-
tries listed below. The provisions of a convention apply in the case
of a decedent dying on or after the effective date shown.

Country Effective Date
Australia . .. January 7, 1954
Canada January 1, 1959

Finland December 18, 1952

France October 17, 1949
*Greece December 30, 1953
Ireland December 20, 1951
Italy . October 26, 1956

Japan April 1, 1955
Norway : December 11, 1951
Switzerland .° September 17, 1952
Union of South Africa. .: July 15, 1952

United Kingdom .. July 25, 1946

‘Section 3 ot the instructions governs real property.