International aspects of IRD

Tax advisers have long been familiar with Sec. 691 in the domestic context (i.e., when a decedent and beneficiary are both US citizens or residents). However, rapidly increasing mobility has resulted in many situations in which either the decedent or the beneficiary (but not both) is not a US citize...

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Bibliographic Details
Published in:The Tax Adviser 2001-08, Vol.32 (8), p.516
Main Author: Bakale, Anthony
Format: Magazinearticle
Language:English
Subjects:
Beneficiaries
Decedents' estates
Estate planning
Foreign source income
Income in respect of a decedent
Income taxes
Internal Revenue Code
International aspects
Nonresidents
Section 691
Wages & salaries
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Summary:Tax advisers have long been familiar with Sec. 691 in the domestic context (i.e., when a decedent and beneficiary are both US citizens or residents). However, rapidly increasing mobility has resulted in many situations in which either the decedent or the beneficiary (but not both) is not a US citizen or resident. The first situation is when a decedent has at all times been a US. nonresident alien, but his beneficiary is a US citizen or resident. At the time of his death, the decedent had a right to receive deferred compensation (which was not a pension) for services performed entirely outside the US. The right comes into the hands of the beneficiary who collects the money. The question becomes, how will the money that the beneficiary receives be characterized. Under Sec. 691(a)(3), the money is treated as if it had been acquired by the beneficiary. The second situation occurs when a US citizen or resident dies owning an installment obligation receivable that arose from the casual sale of a corporation's nonmarketable stock. The receivable comes into the hands of the beneficiary who is a US nonresident alien. The beneficiary then collects the principal amount of the obligation.
ISSN:0039-9957