Estate and Gift Tax Treaty

A treaty is an agreement between two countries in which each country agrees to compromise to achieve a desired goal. In the United States a treaty supersedes any state law that might contradict the treaty. In addition, a treaty will supersede the Internal Revenue code. The United States has set up tax treaties with certain countries to prevent double taxation of individuals upon their deaths. Thus, before advising an NRA about their tax liability a tax practitioner must research whether or not that citizen is subject to a treaty.