A non-citizen owns a Florida condo. The estate exemption is $60,000, not $15 million.

A nonresident alien who buys a Florida condominium faces federal estate tax at a $60,000 threshold, not the $15 million exemption available to U.S. citizens. The difference is 250 to one. A $600,000 condo generates roughly $180,000 of estate tax at death.

The Two Estate Tax Regimes

The United States operates two parallel estate tax systems. Under 26 U.S.C. § 2101(a), a tax is imposed on the transfer of the taxable estate of every decedent nonresident not a citizen of the United States. The structure is simple: the Internal Revenue Code counts only property situated in the United States under § 2103, and it grants a unified credit of $13,000 under § 2102(b)(1).

That $13,000 credit corresponds to a $60,000 filing threshold. If the date of death value of U.S.-situs assets exceeds $60,000, the executor must file Form 706-NA. The threshold has not been indexed for inflation. It has remained at $60,000 for decades.

U.S. citizens and residents receive a different number. The applicable exclusion amount is $15,000,000 for deaths occurring in 2026. The One Big Beautiful Bill Act made this permanent and indexed the figure for inflation beginning in 2026. A married couple can combine $30,000,000 through portability under § 2010(c)(4). The maximum tax rate is 40 percent under § 2001(c) for both regimes.

The 40 percent rate applies to the full amount above the threshold. A Colombian national who dies owning a $600,000 Miami condo has $540,000 of taxable estate. The tentative tax on that amount is approximately $192,800 under the rate schedule. After subtracting the $13,000 unified credit, the estate owes $179,800. That is a 30 percent effective rate on the property value. The tax must be paid within nine months.

What Counts as U.S.-Situs Property

Real property located in the United States is U.S.-situs property. The regulation at 26 CFR § 20.2104-1(a)(1) states this flatly. A condominium unit in Miami is real property. So is a house in Orlando, a lot in Tampa, or a vacation property in the Keys. Location controls.

Stock in a domestic corporation is also U.S.-situs property under § 2104(a). Shares of stock issued by a domestic corporation are deemed property within the United States. Stock of a foreign corporation is not. This distinction matters for planning but does nothing for someone who already owns real estate in their own name.

Some assets are carved out. Bank deposits, portfolio debt obligations, and life insurance proceeds paid to a nonresident alien beneficiary generally are not U.S.-situs property under § 2105(b). Treasury bills do not count. A checking account at a Miami bank does not count. The condominium does.

Florida Ancillary Probate

When a nonresident of Florida dies leaving real property in the state, Florida Statutes § 734.102(1) requires ancillary administration. A personal representative specifically designated in the decedent's will to administer the Florida property is entitled to have ancillary letters issued if qualified to act in Florida. This is a separate probate proceeding from whatever occurs in the decedent's home country or state of residence.

Florida has no state estate tax. That does not eliminate the federal tax. The 40 percent federal rate applies to U.S.-situs property regardless of which state it sits in. The absence of a Florida estate tax is a common source of confusion for buyers who assume "no estate tax" means total exemption.

The ancillary proceeding typically takes six to nine months at minimum. Heirs who live in another country may have no U.S. bank account and no mechanism to access liquid assets quickly. The estate tax is due within nine months. If the property must be sold to pay the tax, the timeline compresses.

The Treaty Gap

The United States has estate and gift tax treaties with 15 countries: Australia, Austria, Canada (estate provisions in income tax treaty), Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, South Africa, Switzerland, and the United Kingdom.

Many of these treaties provide a proportional unified credit. If a Canadian national dies with $600,000 of U.S. real estate and $5,000,000 of worldwide assets, the U.S. assets represent 12 percent of the worldwide estate. The treaty grants 12 percent of the full U.S. unified credit, which reflects the $15,000,000 exemption equivalent. The proportional credit is approximately $540,000 equivalent. A $600,000 condo is fully protected. The estate tax is zero.

The United States has no estate tax treaty with Mexico, Brazil, Argentina, Colombia, Venezuela, Chile, Peru, Ecuador, the Dominican Republic, or any other Latin American country. Income tax treaties exist with several of these countries but they do not include estate tax provisions. A Mexican national receives no treaty relief. A Brazilian national receives no treaty relief. A Venezuelan national receives no treaty relief.

This is not an oversight. It is a 250 to one difference in treatment with no remedy. The buyer from Bogotá and the buyer from Toronto face entirely different outcomes for the same transaction.

The Single-Member LLC Does Not Solve This

A common suggestion is to hold the real estate through a single-member limited liability company. The LLC provides liability protection under Florida law. For federal income tax purposes, a single-member LLC is a disregarded entity under Treasury Regulation § 301.7701-3 unless it elects to be taxed as a corporation. The owner reports income and deductions on their own return as if the LLC did not exist.

The regulations governing disregarded entity status apply to income tax purposes. They do not explicitly address estate and gift tax treatment. Professional sources note that there is uncertainty whether a single-member LLC is recognized or disregarded for estate tax purposes. The most likely result is that the IRS will treat the owner as owning the underlying real estate directly.

If a nonresident alien owns U.S. real estate through a U.S. single-member LLC, the LLC does not create a layer between the owner and the property for estate tax purposes. The real estate is U.S.-situs property under § 2104(a) and 26 CFR § 20.2104-1(a)(1). The $60,000 threshold still applies. The estate tax is still calculated on the property value. The LLC may avoid probate if the membership interest passes by operation of law, but it does not avoid the federal estate tax.

One article in the National Association of Estate Planners and Councils Journal states that if a foreign single-member LLC owns U.S.-situs assets, the sole member will be deemed to own the underlying U.S. assets directly and thus have U.S. estate tax exposure. Another source warns of potential risk due to the uncertainty of situs rules for single-member LLCs treated as disregarded entities.

The Tax Court held in Pierre v. Commissioner, T.C. Memo. 2010-106, that a single-member LLC should be recognized as a separate entity for federal gift tax purposes. The IRS had argued for disregarded treatment. The court rejected that position. This case addressed gift tax, not estate tax. It is a Tax Court memorandum decision. It does not provide conclusive authority for estate tax treatment.

The Foreign Corporation Structure

A foreign corporation is explicitly recognized as a separate entity for estate tax purposes. Stock of a foreign corporation is explicitly non-U.S.-situs property under § 2104(a). If a nonresident alien owns U.S. real estate through a foreign corporation, the gross estate includes the stock of the foreign corporation at death. The stock is situated outside the United States. The underlying real estate is not counted.

This is an established planning technique. A Panama corporation purchases the Miami condo. The nonresident alien owns the stock of the Panama corporation. At death, the stock of the foreign corporation is not U.S.-situs property. The U.S. estate tax is zero.

The structure has trade-offs. The corporation pays 21 percent federal tax on net rental income. Individual nonresident aliens pay 30 percent withholding on gross rental income, but they can elect under § 871(d) to be taxed on net income at graduated rates. The top individual rate is 37 percent. The corporate rate may be lower or higher depending on expenses.

When the corporation sells the property, the buyer must withhold 15 percent of the amount realized under the Foreign Investment in Real Property Tax Act. The withholding applies to the full sale price, not just the gain. The corporation files Form 1040-NR to report the actual gain and claim a refund if the withheld amount exceeds the tax. The buyer is responsible for withholding and must remit the amount to the IRS within 20 days using Form 8288.

The stock does not receive a step-up in basis at death. Under § 1014, U.S. real estate held directly by a nonresident alien receives a step-up to fair market value at the date of death. This reduces capital gains tax when heirs sell the property. Stock of a foreign corporation does not receive this benefit because the stock itself is not U.S.-situs property. The built-in gain remains in the stock. If the heirs liquidate the corporation and distribute the property, they may trigger recognition of the accumulated gain.

Section 2104(b) creates a trap for transfers with retained powers. The statute provides that any property of which the decedent has made a transfer, by trust or otherwise, within the meaning of §§ 2035 to 2038, shall be deemed to be situated in the United States if so situated either at the time of the transfer or at the time of death. If a nonresident alien transfers U.S. real estate to a foreign corporation but retains the power to alter, amend, revoke, or terminate the arrangement, the underlying U.S. property can be pulled back into the U.S. gross estate. The structure must be clean.

Why This Is Invisible

Real estate agents and title companies are not required to advise foreign buyers on U.S. estate tax consequences. One source states plainly that a real estate agent or title company cannot tell you the best way to title your property. The professionals at the closing table are focused on completing the transaction. Estate tax is a post-death issue. It does not appear in the chain of title. It is not a lien. It does not cloud marketability.

The buyer signs documents in English. The IRS Form 706-NA instructions are a dense technical document. Many buyers do not speak English as a first language. The $60,000 threshold sounds modest. It sounds like it protects small estates. In reality, it captures every condominium purchase and most residential real estate transactions. The effective rate on a $600,000 property is 30 percent of the purchase price.

The issue is invisible until death, when it becomes an immediate liquidity crisis. The heirs may live in another country. They may not have U.S. bank accounts. They may not know that a nine-month deadline is running. They may not know that Florida requires ancillary probate. They may not know that federal estate tax is separate from Florida's absence of a state estate tax.

International tax attorneys who handle cross-border estate planning are concentrated in major cities and expensive. A local Florida real estate attorney may not encounter the issue frequently enough to flag it proactively. The buyer's attorney in their home country may not know U.S. estate tax law. The structure falls between professional silos.

Cultural expectations compound the problem. Buyers from Latin America may assume protections similar to their home country's estate regime. They may assume that property purchased in their own name passes directly to heirs without tax. They may assume that the absence of a Florida state estate tax means no estate tax at all. The federal system operates differently.

Magnitude of the Exposure

A $500,000 Florida condominium generates approximately $176,000 of federal estate tax for a nonresident alien with no treaty protection. The taxable estate is $440,000 after the $60,000 threshold. The tentative tax on that amount is approximately $189,000 under the § 2001(c) rate schedule. After subtracting the $13,000 unified credit, the estate owes $176,000. That is 35 percent of the property value.

A $1,000,000 property generates approximately $376,000 of estate tax. The taxable estate is $940,000. The tentative tax is approximately $389,000. After the credit, the estate owes $376,000. That is 38 percent of the property value. The effective rate approaches the 40 percent statutory maximum as the property value increases.

A married couple from Colombia who each own a $600,000 condominium separately face $179,800 of estate tax on each property when the first spouse dies. The total exposure is $359,600. The $15,000,000 exemption for U.S. citizens includes portability under § 2010(c)(4). A surviving spouse can use the deceased spouse's unused exemption. Portability does not exist for nonresident aliens under the statute.

With a $15,000,000 exemption, only 0.2 percent of U.S. estates pay federal estate tax. With a $60,000 threshold, almost every Florida condominium owned by a nonresident alien triggers estate tax. The problem is not limited to the wealthy. It affects every buyer.

Step-Up in Basis and Life Insurance

Heirs receive a step-up in basis to fair market value at the date of death under § 1014. If the nonresident alien purchased the condominium for $400,000 and it is worth $600,000 at death, the heirs' basis is $600,000. When they sell the property for $600,000, they recognize no capital gain. The step-up eliminates the built-in gain.

This does not offset the immediate estate tax liability. The estate still owes $179,800 within nine months. The step-up reduces future capital gains tax. It does not provide liquidity to pay the estate tax. If the heirs must sell the property to raise the funds, they benefit from the step-up, but they are selling under time pressure in a forced liquidation.

Life insurance proceeds paid to a nonresident alien beneficiary are generally not subject to U.S. estate tax. A policy on the life of the nonresident alien, owned by a foreign trust or family member, can provide liquidity to pay the estate tax without increasing the U.S. gross estate. The premium is an additional cost. The insurance does not eliminate the tax. It funds the liability.

Who Should Know

Real estate professionals who work with foreign buyers encounter the threshold difference routinely. The United States has no estate tax treaty with Mexico, Brazil, Argentina, Colombia, Venezuela, Chile, Peru, Ecuador, the Dominican Republic, or any other Latin American country. A buyer from Bogotá and a buyer from Toronto face entirely different outcomes for the same transaction. The real estate professional cannot give tax advice but can identify that estate tax is a consideration and that the buyer should speak with an international tax attorney before closing.

Immigration attorneys who represent clients applying for visas or green cards work at the intersection of residency status and tax consequences. A lawful permanent resident who becomes a U.S. resident for estate tax purposes receives the $15,000,000 exemption but is subject to U.S. estate tax on worldwide assets. Residency for estate tax purposes is based on domicile, which is a facts-and-circumstances test. It is not the same as the substantial presence test for income tax. A green card holder who maintains a home in their country of origin and does not intend to remain in the United States permanently may not be a U.S. resident for estate tax purposes. The analysis is specific.

International CPAs who prepare Form 1040-NR for nonresident aliens earning U.S. rental income see the income side of real estate ownership. The estate tax exposure exists when the client owns U.S. real estate in their own name. The foreign corporation strategy works but it requires advance planning. It cannot be implemented after death. The CPA can identify the issue and refer the client to an international tax attorney for restructuring before death.

Bottom Line

A nonresident alien who owns a Florida condominium in their own name faces federal estate tax at a $60,000 threshold. The rate is 40 percent on amounts above that threshold. A $600,000 condo generates roughly $180,000 of estate tax. The United States has no estate tax treaty with any Latin American country. A single-member LLC provides liability protection but almost certainly does not avoid the estate tax. A foreign corporation holding the property eliminates U.S. estate tax exposure but creates income tax complexity and eliminates the step-up in basis. The structure must be established before closing. It cannot be unwound after death.

This article describes how the law is written as of August 2026. It is not advice about any specific person's situation. The mechanics described here are general. A licensed international tax attorney should review any specific document or transaction before a nonresident alien purchases or structures U.S. real estate.

Written to the law as it stood in August 2026.