An Italian resident owning U.S. real estate, U.S. shares or a Florida LLC interest can be exposed to U.S. federal estate tax on U.S.-situated assets above the $60,000 Form 706-NA threshold, alongside Italian succession tax and the 1955 Italy–U.S. estate tax treaty.
Published: 2026-08-28 · Last verified: 2026-08-28 · 12 min
An Italian resident who owns U.S. real estate, shares in U.S. corporations, a Florida LLC interest or a U.S. investment portfolio may be exposed to U.S. federal estate tax on U.S.-situated assets at death, with a Form 706-NA filing threshold of just $60,000 — while the same estate is also assessed in Italy under D.Lgs. 346/1990. The 1955 Italy–U.S. estate tax convention, still in force, can affect asset treatment, credits and double-taxation relief. The planning window that matters is the moment of acquisition, not the moment of succession.
Updated 28 August 2026 · Massimo Leonardi — Italian Attorney · Dottore Commercialista · Statutory Auditor — Italian qualifications only.
Italian individuals increasingly own assets in the United States. These typically include:
Most investors focus on taxation while they are alive. Far fewer consider what happens to those assets at death. For an Italian individual with U.S. assets, succession may involve two legal and tax systems at the same time — and the two systems do not use the same definitions, the same thresholds or the same filing calendar.
The first distinction to get right is between income taxation and estate taxation. A person can be a nonresident for U.S. estate tax purposes and still own assets situated in the United States.
For a decedent who was neither a U.S. citizen nor domiciled in the United States, U.S. federal estate tax generally focuses on certain U.S.-situated assets under IRC §§ 2101-2108. Crucially, the concept of domicile used for estate tax purposes is not the same as the tests commonly used to determine U.S. income tax residency — the substantial presence test that matters for income tax and reporting obligations is a different exercise entirely.
The answer depends on the type of asset. Under IRS guidance and Treas. Reg. §§ 20.2104-1 / 20.2105-1, examples of U.S.-situated assets may include:
Conversely, certain bank deposits, portfolio debt obligations and life-insurance proceeds may receive different situs treatment. A Miami apartment, shares in a U.S. corporation and an ordinary bank deposit should not automatically be treated in the same way for estate tax purposes.
This is one of the most misunderstood aspects of U.S. estate taxation for foreign investors. For the estate of a nonresident who was not a U.S. citizen, Form 706-NA generally must be filed when the relevant U.S.-situated assets, together with the amounts specified by the applicable rules, exceed the $60,000 filing threshold (IRC § 6018(a)(2)). The threshold is not indexed annually for inflation.
It is therefore misleading to compare this figure with the much larger estate tax exclusion applicable to U.S. citizens and domiciliaries. The correct treatment must be determined on the basis of the individual's status, the composition of the assets and any applicable treaty provisions.
Element — Nonresident non-citizen (NRNC) — U.S. citizen / domiciliary
Taxable base — U.S.-situated assets only — Worldwide estate
Filing threshold — $60,000 (Form 706-NA) — Unified exclusion (materially higher)
Inflation indexation — None — Yes
Treaty relief — Italy–U.S. 1955 convention may apply — Not relevant
This is particularly important for Italian clients. Italy and the United States have a bilateral estate tax treaty — the Convention between Italy and the United States relating to estate tax, signed in 1955 and still in force. The existence of the treaty means that the analysis should not stop at the ordinary U.S. domestic rules.
Treaty provisions may affect issues such as the treatment of assets, available credits and relief from double taxation. The IRS expressly recognises Italy among the countries having an applicable U.S. estate tax treaty. A cross-border estate should therefore be reviewed under both domestic legislation and the treaty.
Real estate physically located in the United States is the classic example of a U.S.-situated asset for federal estate tax purposes. An Italian purchasing a home or investment property in Florida should consider succession planning at the time of acquisition. The questions to answer include:
Waiting until after the property has appreciated significantly usually reduces the planning alternatives available — and restructuring can itself trigger tax consequences. Note that IRC § 897 (FIRPTA) is a separate matter: it governs income tax withholding on the disposition of U.S. real property interests, not estate tax.
The existence of an LLC does not, by itself, provide a universal estate tax solution. The analysis can depend on how the entity is structured, its tax classification, the underlying assets and the nature of the ownership interest.
For this reason, forming an LLC solely because an investor has heard that it "avoids estate tax" can be a serious mistake. The legal structure should be chosen only after considering income tax, liability protection, succession and the Italian tax treatment together — as set out in our pillar guide to the Florida LLC for non-U.S. residents and in the compliance layer that follows it, including Form 5472 for foreign-owned LLCs.
Foreign investors sometimes assume that securities held through an Italian or European broker cannot be U.S. assets. For U.S. estate tax purposes, however, under IRC § 2104(b), stock of corporations organised under U.S. law can constitute U.S.-situated property even where the certificates or investment account are held outside the United States.
This is a particularly important issue for Italian investors with significant direct exposure to U.S. equities — a portfolio of individual U.S. shares held at an Italian bank can sit well above the $60,000 threshold without the holder ever having set foot in the United States.
Not every U.S. financial asset receives identical treatment. Under IRC § 2105(b), certain deposits and bank accounts not connected with a U.S. trade or business may be treated differently for estate tax purposes. The fact that money is physically deposited with a U.S. institution does not, by itself, answer the estate tax question. Each asset must be classified correctly — which is also true on the reporting side, as explained in our guide to the U.S. business bank account and Italian reporting.
An Italian individual should not plan U.S. assets without considering the Italian succession regime under D.Lgs. 346/1990. The heirs, the residence of the deceased, the nature and location of the assets and the applicable international rules may all influence the final tax treatment.
Where the deceased was resident in Italy and owned U.S. real estate, the Italian side will also have involved IVIE under Article 19 of D.L. 201/2011 and Quadro RW monitoring during their lifetime — obligations that frequently surface for the first time during the succession, when the heirs discover an undeclared foreign asset. The objective of cross-border estate planning is therefore not simply to minimise one U.S. tax: it is to build a structure that works coherently in both Italy and the United States.
Estate planning is not limited to drafting a will. A complete review may include:
The correct solution depends heavily on the client's personal and patrimonial circumstances.
The most effective moment for estate planning is often before acquiring the U.S. asset. At that stage, the investor can still compare different ownership structures and understand their tax and succession consequences. Trying to restructure an investment many years later is more complex and may itself create tax consequences. The same logic applies to a broader relocation project: see the ten tax and legal steps before moving from Italy to Florida.
IIILEX International Consulting LLC assists Italian individuals, families and entrepreneurs with cross-border legal and tax planning involving Italy and the United States, from our office in St. Petersburg, Florida. Our assistance may include:
Cross-border estate planning should begin when you acquire the asset, not when succession becomes an issue. Book a diagnostic call to map your U.S.-situated assets and the exposure they carry on both sides.
An individual who was neither a U.S. citizen nor domiciled in the United States can still be subject to U.S. federal estate tax on certain U.S.-situated assets at death, under IRC §§ 2101-2108, subject to any relief provided by the Italy–U.S. estate tax treaty.
For nonresident non-citizen decedents, Form 706-NA generally must be filed when U.S.-situated assets, plus the amounts specified by the applicable rules, exceed $60,000 (IRC § 6018(a)(2)). The threshold is not indexed for inflation and should not be compared directly with the much larger exclusion available to U.S. citizens and domiciliaries.
Real estate physically located in the United States is a classic example of a U.S.-situated asset for federal estate tax purposes under Treas. Reg. § 20.2104-1. Any exposure must be reviewed together with the Italy–U.S. estate tax treaty and the Italian succession regime under D.Lgs. 346/1990.
No. The treatment depends on how the entity is structured, its tax classification and the underlying assets. Forming an LLC solely because it is said to 'avoid estate tax', without a broader income tax, liability and Italian-side analysis, can be a costly mistake.
Generally yes. Under IRC § 2104(b), stock of corporations organised under U.S. law can be treated as U.S.-situated property for estate tax purposes even where the securities account is held outside the United States. Certain bank deposits and portfolio debt may instead be excluded under IRC § 2105(b).
Yes. Italy and the United States have a bilateral estate tax convention, signed in 1955 and still in force. Treaty provisions may affect asset treatment, available credits and relief from double taxation, so both domestic law and the treaty must be reviewed before any conclusion is drawn.
I'm Italian and Own Assets in the U.S.: What Happens to Them When I Die? is handled from our Florida practice for Italian clients living in the United States and in Italy: office in St. Petersburg (Pinellas County, Tampa Bay), assistance across Florida — including Miami and South Florida — and remotely throughout Italy.
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IIILEX International Consulting LLC is the Florida-based practice of Avv. Dott. Massimo Leonardi — Italian-qualified Attorney (Avvocato), Dottore Commercialista and Statutory Auditor (Revisore Legale), qualified in Italy, with 30+ years of Italian practice. We work exclusively on cross-border matters between Italy and the United States, in coordination with licensed U.S. professionals for matters of U.S. law.
IIILEX International Consulting LLC · 7901 4th St N STE 300, St. Petersburg, FL 33702 · us@3lex.us · +1 (786) 604-8764 · +39 335 344 9660
Massimo Leonardi is admitted to practice law in Italy and is not admitted to practice law in Florida or elsewhere in the United States. He is qualified in Italy as Dottore Commercialista and Revisore Legale and is not a U.S. Certified Public Accountant. IIILEX International Consulting LLC provides cross-border consulting and Italian legal and tax advisory services. Matters requiring advice on U.S. or Florida law are handled in coordination with appropriately licensed U.S. professionals.