Question on US estate tax for legal person (for EU company)

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Topic Author
masni
Posts: 58
Joined: Thu Sep 04, 2014 5:56 am

Question on US estate tax for legal person (for EU company)

Post by masni »

All,

I live in a country which does not have a tax treaty with the US, so I would get hit at the 60K limit for estate tax if I own US shares. However, as I work as an IT contractor, all my earning goes to my company for tax purposes. It is only me and my wife, and we usually have only 1 or 2 clients at a time. The main income of the company comes from my IT work and not from dividends from shares, etc

For now, my company (as a legal person), is purchasing/owning US shares (both individual shares and ETF based in Ireland) and for accounting purposes, all equites are are marked as "pension liabilities". This is the most efficient way to manage my income from a tax perspective in my country.

From my understanding, if I die, and the company (legal person & LLC) passes to my wife, there is no US estate tax liability, as the legal owner is still my company. The company should not been seen as a pass through (we dont have that concept here anyway) and any residue income into my company (IP licensing) would still be more that 50% of the company income when compared to earned dividends

I know I should talk to a solicitor on this, but trying to find one here that can help is difficult bot to mention very expensive (but yes, I try to find one) and over the next few years, I will be moving most of the shares into VUSA ETF, as I reach my 55th birthday.

Does anyone have any experience on this? Any readup or advice?
DJN
Posts: 996
Joined: Sun Nov 19, 2017 11:30 pm

Re: Question on US estate tax for legal person (for EU company)

Post by DJN »

Hi,
knowledge of your country of residence might be helpful in getting feedback from locals with knowledge of your situation.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Topic Author
masni
Posts: 58
Joined: Thu Sep 04, 2014 5:56 am

Re: Question on US estate tax for legal person (for EU company)

Post by masni »

Latvia.

Note that all all undistributed corporate profits are exempt from taxes, and only dividends are taxed.
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