Residents of Japan who are not U.S. citizens and do not live in the U.S. will be taxed by the U.S. if they receive by gift or as a transfer from an estate any of the following assets:
- Real property located in the U.S.
- Tangible property located in the U.S.
- Debts (including bonds and promissory notes) from U.S. persons, governments, corporations or other legal entities
- Shares in U.S. companies
- Goodwill in a U.S. business
- Patents and trademarks registered in the U.S.
- Copyrights licensed or exercisable in the U.S.73
The applicable U.S. estate tax or gift tax can be reduced by a pro rata share of the $1,455,800 credit against the tax. The share of this credit is based upon the percentage that the U.S. estate bears to the entire worldwide estate determined by the following calculation:
$1,455,800 x Value of estate situated in the U.S.
Value of entire gross worldwide estate.74
Citizens of Japan who are living permanently in the U.S. will be taxed by the U.S. on the transfer by gift or at death of any assets regardless of where they are located in the world. The tax which the U.S. will impose on such transfers and the applicable exemptions and credits are those available for any non-citizen domiciled in the U.S. (See answers 4, 5 and 6.)