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Tuesday, June 17, 2008

Estate Planning for Americans with Assets in India

New Jersey is a fairly diverse state, and I find that more and more of my clients are of Indian heritage. So, as with many of the items I write on this blog, I thought I would share some of the advice that I regularly give clients on this topic:

1) India does not have an estate or an inheritance tax;

2) There is no treaty with respect to the US and India on Estate and Inheritance Taxes;

3) As a US citizen, all of your assets, worldwide, will be subject to an estate tax;

4) If you are also a NJ domiciliary; all of your assets in NJ will be subject to both NJ Estate and Inheritance taxes.  Note, New Jersey also has the right to tax some worldwide assets for estate and inheritance tax purposes);

5) There IS a treaty between the US and India with respect to income taxes (see: http://www.unclefed.com/ForTaxProfs/Treaties/india.pdf) Tax returns need to be coordinated and you will receive a deduction for income taxes paid in India. This may still result in higher taxes as you must report income on worldwide profits.

6) You can do planning to minimize the estate tax burden.

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