Understand Tax Risks

Key U.S. Tax Risks for Non-U.S. Persons

Navigate U.S. tax complexities with expert guidance tailored for non-U.S. individuals and investors.

Dividend Withholding Tax

✅ What It Is: Non-U.S. investors holding U.S. stocks face a 30% withholding tax on dividends if they reside in a non-tax treaty country.

✅ Reduction Possibilities: Some tax treaties reduce this rate, but if your country lacks a treaty with the U.S., you will be subject to the full 30%.

✅ Impact: Reduces overall investment returns, making U.S. stock dividends less favorable for non-resident investors.

U.S. Estate Tax Exposure

✅ What It Is: Non-U.S. individuals are subject to U.S. estate tax on U.S.-situs assets, including stocks and real estate, if their total U.S. assets exceed $60,000 at the time of death.

✅ Tax Rate: Up to 40% estate tax on the value of U.S. assets above the exemption threshold.

✅ Impact: Without proper planning, heirs may face significant estate tax liabilities.

Capital Gains Tax (Generally Exempt, With Exceptions)

U.S. Gift Tax for Non-Residents

✅ What It Is: Unlike U.S. citizens, most non-residents are not taxed on capital gains from selling U.S. stocks. However, there are exceptions for certain assets, such as U.S. real estate.

✅ FIRPTA Rules: If a non-U.S. person sells U.S. real estate, a 15% withholding tax applies under FIRPTA (Foreign Investment in Real Property Tax Act), and capital gains tax may be owed.

✅ Impact: While stock capital gains may be tax-free, selling U.S. real estate can trigger unexpected tax liabilities.

✅ What It Is: Gifts of U.S. real estate or tangible assets from non-U.S. persons may be subject to U.S. gift tax.

✅ Exemptions: There are no unlimited gift tax exemptions for non-residents, meaning strategic planning is required to minimize tax exposure.

✅ Impact: Gifting U.S. assets during life can trigger unexpected tax burdens without proper planning.

How to Mitigate U.S. Tax Risks

While U.S. tax laws can be complex, non-U.S. individuals have several strategies to minimize tax exposure:

Trusts & Holding Structures

Using non-U.S. entities or trusts can help shield assets from U.S. estate tax.

Tax Treaty Benefits

If applicable, leveraging tax treaties can reduce withholding tax on dividends.

Investment Structuring

Exploring offshore investment solutions can help optimize asset protection and estate planning.

Legal & Financial Guidance

Consulting with a licensed tax professional can ensure compliance and optimal structuring for your assets.

Stay Informed & Protect Your Wealth

Understanding U.S. tax risks is the first step in protecting your financial future. Explore your options and take proactive measures to ensure your U.S. assets are structured in a tax-efficient manner.

📞 Want to Learn More? Contact us to be connected with a licensed professional who can help you navigate U.S. asset taxation as a non-U.S.-connected non-U.S. resident.