Residents of Germany who are not U.S. citizens and do not live in the U.S. will be taxed by the U.S. upon transfers by gift or at death on the following assets located in the U.S.:
- Real estate to include livestock, equipment and crops thereon but reduced by any debts incurred in the acquisition, repair, or upkeep of the property; 63
- Business property of a permanent U.S. establishment or fixed assets used in a personal service business in the U.S. reduced by any debts related to the business; 64
- Partnership assets which comprise U.S. real estate of a U.S. permanent establishment or personal service business reduced by any debts relating to such partnership assets. 65
citizen and resident of Germany residing in the U.S. but not a citizen of the U.S. will not be considered as “living in the U.S.” until he or she has been a resident of the U.S. for 10 years. 66
domicile of Germany and the U.S. but not a citizen of either country will be considered as “living in the U.S.” if:
- his or her permanent home is in the U.S.; or
- he or she has no permanent home or has a permanent home in both countries but has economic relations which are closest with the U.S. 66
citizen or domicile of Germany (other than a U.S. citizen), who was domiciled in Germany at the time of the decedent’s death, shall be allowed a Unified Credit against estate tax equal to the greater of: (1) $13,000.00 or (2) a percentage of the applicable U.S. Unified Credit against estate tax of $1,455,800 reduced by any previous credits used. The percentage of Unified Credit available is determined by the following calculation:
$1,455,800 x Value of estate situated in the U.S.
Value of entire gross worldwide estate.67
The U.S. will tax all assets transferred to a non U.S. citizen spouse which exceed 50% of the value of the assets taxable in the U.S. This shall not apply if the decedent is a U.S. citizen domiciled in Germany.67 A U.S. or German citizen residing in the U.S. or Germany may have a limited marital exemption of up to $3,500,000 transferred to a non U.S. citizen spouse.67
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