USA 706-NA help

Jun 26, 2021
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United States
Hello, I am trying to complete this form for a client in the D.R. I have various issues and insights and I don't know what's correct anymore. I cannot find anywhere in the instructions to guide me.
My client has a brokerage account with Morgan Stanley here in the US. she is a non resident and non citizen of the US. The account has 4 owners - herself, her husband, and their two children. Her husband passed away recently, therefore requiring this form to be completed according to Morgan Stanley so that they can free up the funds and release them to her as necessary. The account has equities and bonds.
1- I have been told that only equities need to be reported on the form - not the entire value of the account
2- I have been told that only 1/4 of the equities need to be reported on the form since the account is shared by 4 and 1 owner died.
3- the account is valued at over $1.2M and clearly there is a huge difference in the tax liability between the full value of the account and only 1/4 of the equities.

She is desperate to get this completed but I want to make sure I am doing the correct thing according to the law and not someone at Morgan Stanley that fairs to lose $400k under management. My client clearly doesn't know any of the US laws so I also have to educate her in the process, and unfortunately prove that I am correct. TIA for any help! (if possible please provide written guidance)



VIP Member
Dec 19, 2020
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United States
You need to seek an estate attorney familiar with these issues.
Certain things you've stated don't make sense.
How can a brokerage account have 2 parents and 2 children's names on the same account?
There needs to have been a transfer somewhere along the line between the parents to the children that should have required a gift tax return to be filed. Husband and wife account okay - but the children's investments should each be in a separate account.
If they are minors, then the accounts should have been set up under the Uniform Gifts to Minors Act (UGMA).
Segregation of whose funds the investments came from is critically important.
If the family are nonresidents and noncitizens of US why is there a brokerage account established in the US?
That would require a US income tax return to be filed to report the income earned on the investments for each of them.
How is the IRS going to know which party to tax the income ON?
The client may be desperate - but does she want it done RIGHT?

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