IRS Transfer Certificate: $60,000 Threshold, Form 706-NA, and Review

An IRS Transfer Certificate, issued on Form 5173, is the document that releases a deceased nonresident’s U.S. assets from federal estate tax restrictions so banks, brokerages, and transfer agents will hand them over to the estate. It is issued only after the executor files Form 706-NA and the IRS confirms that any federal estate tax has been satisfied or that none was due. From the date the IRS receives a complete filing, expect six to nine months before the certificate arrives.

Why Financial Institutions Insist on It

Treasury regulations prohibit domestic corporations and their transfer agents from moving stock registered to a nonresident decedent until they have a transfer certificate covering that stock.¹ Banks and other custodians follow the same logic because they carry liability for taxes and penalties if they release assets prematurely. That is why an account freezes the moment the institution learns the account holder has died. The certificate is the IRS telling the custodian, in writing, that it is safe to release the property.

When You Don’t Need a Transfer Certificate

Two situations avoid the process.

The first is a U.S.-appointed executor. If an executor or administrator has been appointed, qualified, and is acting within the United States, the regulations exempt transfers made on that authority.¹ A U.S. attorney or fiduciary who holds letters testamentary or letters of administration from a U.S. court can present those documents directly to the financial institution.

The second is an estate below the filing threshold. When the IRS determines that no Form 706-NA was required, it issues a letter stating that no Transfer Certificate is required and none will be issued.² That letter, plus the death certificate and any probate paperwork, is generally enough to release the assets. Contact each institution early, because internal thresholds and release procedures vary.

One boundary worth noting: Form 4422 is a different document, used to discharge a specific piece of property from the federal estate tax lien so it can be sold. It does not substitute for Form 5173.³ If no U.S. executor has been appointed, the estate still needs a Transfer Certificate.

The $60,000 Threshold

Form 706-NA must be filed if the decedent was neither a U.S. citizen nor domiciled in the United States and the gross value of U.S. situs assets — combined with any prior gift tax specific exemption used and any adjusted taxable gifts — exceeds $60,000 at the date of death.⁴ The figure is gross, before any deductions for debts or mortgages. A $80,000 stock position with a $30,000 margin balance still counts as $80,000 for threshold purposes.⁵

Domicile is not the same as residence. A person can live in the U.S. for years without becoming domiciled here if they always intended to return home. And plenty of estates that cross the $60,000 line owe no tax after deductions, credits, or treaty benefits are applied. The filing is still mandatory, because the return is the only path to the Transfer Certificate.

What Counts as U.S. Situs Property

Stock of U.S. corporations, wherever the certificates physically sit
Real property located in the United States
Tangible personal property (art, vehicles, jewelry) physically in the U.S. at death
Debt obligations of U.S. persons, domestic corporations, or U.S. government entities

Two categories are treated as situated outside the U.S. even when the money sits here: life insurance proceeds on the decedent’s life, and bank deposits that are not effectively connected with a U.S. trade or business.⁴ A decedent holding $200,000 in a U.S. savings account and $40,000 in U.S. stocks has only $40,000 in countable situs assets and falls below the threshold.

The Nine-Month Clock

Form 706-NA is due nine months after the date of death. The same deadline applies to paying any tax owed.⁴

The executor can request an automatic six-month filing extension by submitting Form 4768 before the original deadline. An executor located outside the United States who has already used the six-month extension may request additional time with a second Form 4768 and a written explanation.⁴ A filing extension is not a payment extension: any estimated tax remains due at the nine-month mark, and interest runs on unpaid balances from that date.

Late filing brings a 5% failure-to-file penalty per month on unpaid tax (capped at 25%) and a 0.5% failure-to-pay penalty per month (also capped at 25%). When both apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay amount.⁶ Interest compounds on top of the penalties.

Penalties only bite if tax is owed. An estate that files late but owes nothing pays no financial penalty. It still has to file, though, and every month of delay pushes back the certificate and, with it, access to the assets.

Building the Form 706-NA Package

Assemble certified copies of the death certificate, the will or trust if any, and proof of the executor’s authority (a grant of probate from the home country, for example). An executor abroad who wants a U.S. attorney or accountant to file should have that representative submit Form 56 to establish the fiduciary relationship with the IRS.

Valuing the Assets

Every U.S. situs asset is valued at the date of death. The estate may instead elect the alternate valuation date six months after death, but only if that election decreases both the gross estate and the net tax due, and the election applies to all property.⁴

Publicly traded securities are valued at the mean of the highest and lowest quoted selling prices on the valuation date; if no trades occurred that day, regulations prescribe a weighted average of the nearest trading dates before and after.⁷ Real property needs a professional appraisal from a qualified U.S. appraiser. The return must also state the value of the worldwide estate, because deduction proration and treaty credits depend on the ratio of U.S. property to the worldwide total.

Deductions Are Prorated

The estate can deduct funeral expenses, administration costs, claims against the estate, and unpaid mortgages on included property.⁴ Only a share is allowed: the U.S. portion of the worldwide gross estate. If U.S. assets are 10% of worldwide assets, 10% of deductions apply. Executors who refuse to disclose non-U.S. assets forfeit deductions entirely.

Credits and Estate Tax Treaties

Nonresident estates are taxed at the same graduated rates as U.S. citizens, up to 40% above $1 million. The unified credit, however, is only $13,000 by default, which shelters just the first $60,000 of taxable value. U.S. citizens and residents dying in 2026 have a $15 million exclusion by comparison.⁸

Estate tax treaties change the math. The U.S. has estate tax treaties with 15 countries: Australia, Austria, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, South Africa, Switzerland, and the United Kingdom. Most treaties prorate the full U.S. exemption in proportion to the U.S. share of the worldwide estate.⁸ For a decedent from a treaty country whose U.S. holdings are a small slice of overall wealth, the prorated credit often eliminates the tax.

Claiming a treaty benefit means identifying the specific article relied on, attaching supporting documentation, and showing the calculation. A checked box alone will draw an information request and add months to the timeline.

Where to File

Form 706-NA cannot be filed electronically. Mail the return and attachments to:⁴

Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999

For private delivery services like FedEx or UPS:

Internal Revenue Submission Processing Center
333 W. Pershing
Kansas City, MO 64108

Use certified or registered mail (or the private carrier equivalent) so you have proof of delivery and a postmark that establishes the filing date. Keep a complete copy of the package. If the IRS misplaces the filing, that copy is your only defense.

Any tax owed is due by the nine-month deadline even with a filing extension. EFTPS is the standard electronic payment channel, but it requires a U.S. bank account. Executors abroad without one can arrange a same-day wire through a financial institution with a U.S. affiliate.⁹ A check or money order payable to “United States Treasury” can accompany the mailed return.

What Happens During IRS Review

Plan on six to nine months from the IRS’s receipt of a complete filing before Form 5173 is issued.¹⁰ Complex estates, treaty claims, and peak-season filings take longer. There is no formal way to expedite.

Expect a Request for Additional Information if valuations are unclear, worldwide estate documentation is missing, or a treaty claim is thin. Answer each RAI completely the first time. Partial responses generate second RAIs and reset the processing clock. An extra week to gather everything the IRS asked for is cheaper than a repeat cycle.

When review is complete and any tax has been paid, the IRS mails the certificate to the executor or authorized representative. It covers the U.S. assets identified on the return.

Releasing the Assets

Bring each institution a copy of Form 5173 and a certified death certificate. Some institutions also require their own internal forms.

The certificate lifts the federal tax restriction; it does not grant legal authority to take possession. Most institutions still want letters testamentary or letters of administration from a U.S. court, or equivalent documentation from the home country if no U.S. probate was opened. Ask each institution early what it requires so those documents come together in parallel.

State obligations sit on top of the federal ones. Real property in a U.S. state may trigger a state estate or inheritance tax, and some states require their own clearance before title transfers. Form 5173 does not resolve state issues.

Once federal and state clearances are in place and each institution has processed its paperwork, the executor distributes the assets under the will or the succession laws of the decedent’s home country. From death to final distribution commonly runs twelve to eighteen months, with IRS review the largest single component.

1
GovInfo. 26 CFR 20.6325-1 – Release of Lien or Partial Discharge of Property; Transfer Certificates in Nonresident Estates
2
Internal Revenue Service. Transfer Certificate Filing Requirements for the Estates of Nonresidents Not Citizens of the United States
3
Internal Revenue Service. Application for Certificate Discharging Property Subject to Estate Tax Lien
4
Internal Revenue Service. Instructions for Form 706-NA (Rev. September 2025)
5
Internal Revenue Service. Estate Tax
6
Taxpayer Advocate Service. Failure to File Penalty Under IRC 6651(a)(1), Failure to Pay an Amount Shown As Tax on Return Under IRC 6651(a)(2)
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eCFR. 26 CFR 20.2031-2 – Valuation of Stocks and Bonds
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Office of the Law Revision Counsel. 26 USC 2102 – Credits Against Tax
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EFTPS. International Guide for Paying Federal Taxes Electronically
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Internal Revenue Service. Transfer Certificate Filing Requirements for the Estates of Nonresident Citizens of the United States