Taxation
Ca. Tax Lawyer 2017, VOLUME 26, NUMBER 3
Content
- An Interview with the Indicted: the Unique Client Perspective
- Bar Business Taxation Section Overview
- California Creates New Tax Departments; Limits Roles of Elected Tax Officials
- Contents
- Form W-9 or W-8Ben? the Proper Classification of a Dual Resident Taxpayer for Purposes of Documenting Status with a Foreign Financial Institution Under the Foreign Account Tax Compliance Act
- Masthead
- Message from the Chair
- Tax Procedure: California Should Conform to Federal Law and Allow Expedited Tentative Nol Refunds
- Taxation Section 2016-2017 Leadership Directory
- The Roots and Fruits of Section 6039G
- Visiting the Committees
- Guidance Needed Regarding Federal Estate Taxation of Exchange Traded Funds Owned by Nonresident Aliens
Guidance Needed Regarding Federal Estate Taxation of Exchange Traded Funds Owned by Nonresident Aliens1
By Patrick W. Martin2 & A gustin Ceballos3
I. EXECUTIVE SUMMARY
Under Section 2104 of the Internal Revenue Code ("IRC" or "Code"),4 there are certain assets deemed "situated in the United States" for a nonresident who is not a citizen nor domiciled in the United States ("U.S.") for transfer tax purposes ("NRND").5 Such assets are therefore subject to estate tax upon the NRND’s death.6 Conversely, section 2105 of the Code is a companion provision that defines properties not situated in the United States and therefore not subject to estate tax upon the NRND’s death.
The Code and regulations clarify the estate tax treatment of stock of domestic and foreign corporations, by expressly including stock issued by a domestic corporation as situated in the United States, and expressly excluding stock issued by a foreign corporation. However, both the Code and the Treasury regulations fail to address whether and when an Exchange Traded Fund ("ETF") is (or is not) property situated in the United States under sections 2104 or 2105 of the Code.