US Estate Tax
Form 706 for Korean Assets: US Estate Tax Explained
In Brief
When a US-citizen or US-domiciled green card holder dies owning Korean assets, the relevant US form is Form 706 (estate tax) — not Form 3520. The 2026 exemption is $15 million per individual. Form 706-CE claims a credit for Korean inheritance tax paid.
Form 706 vs. Form 3520: The Critical Distinction
The trigger is the decedent's status, not the location of assets. Form 3520 reports gifts and inheritances from foreign persons. If your parent was a US citizen or US-domiciled green card holder, they are a US person — so Form 3520 does not apply.
| Scenario | Form 3520? | Form 706? |
|---|---|---|
| US-person decedent + Korean assets | No | Yes (if estate > $15M) |
| Korean-citizen (foreign) decedent | Yes (> $100K) | No |
The 2026 Exemption: $15 Million
Form 706 is filed by the estate's executor when the decedent's worldwide gross estate exceeds $15 million (2026), or $30 million for married couples using portability. The top rate is 40%. The worldwide estate includes all Korean assets — Korean real estate, bank accounts, stocks, and business interests.
Most Korean-American families fall under the exemption and owe no US federal estate tax. However, filing Form 706 may still benefit you for the portability election (transferring unused exemption to a surviving spouse) and for documenting stepped-up basis under IRC §1014.
Form 706-CE: Avoiding Double Taxation
The US allows a credit for foreign death taxes paid (IRC §2014). After Korean inheritance tax is paid, the executor files Form 706-CE (Certificate of Payment of Foreign Death Tax) and claims the credit on Form 706 Schedule P. This effectively eliminates double taxation on Korean-situated assets.
No US-Korea Estate Tax Treaty
Unlike Japan, the UK, Germany, and France, Korea has no estate tax treaty with the US — only the 1979 income tax treaty. The Form 706-CE credit operates through US domestic law (IRC §2014), not a treaty. See our treaty guide.
The Timing Challenge
Form 706 is due 9 months from death — the same as the Korean deadline. Korean tax must be paid first so the 706-CE credit can be claimed. If Korean payment is delayed, file Form 706 first and amend later under IRC §2014(b).
Domicile Matters for Green Card Holders
A green card holder who genuinely moved back to Korea may be a non-resident alien (NRA) for estate tax — taxed only on US-situated assets with a mere $60,000 exemption (Form 706-NA). Domicile is a facts-and-circumstances test, distinct from income-tax residency.
Important
We handle the Korean side; partner US attorneys handle Form 706.
Our operator is a licensed Korean CPA & Tax Accountant — not US-licensed. We do not calculate US estate tax. Form 706 is prepared by partner US estate tax attorneys.
Free ConsultationGeneral information only, not legal advice. US estate tax (Form 706) requires a US-licensed attorney or CPA. Consult a qualified professional.