If you live outside the US and you're not a US citizen, a US property in your name is subject to "estate tax," the federal tax on what you leave when you die, and the exemption is only $60,000. Above that, rates run from 18% to 40%. A US LLC on its own generally doesn't solve the problem. Structures that can reduce the tax, such as a foreign company or a trust, come with costs and tax consequences in the US and in your home country. Decide with a tax attorney in both countries before you sign the purchase.
What estate tax is and why it weighs on foreign owners
Estate tax is charged on a person's estate when they die, before it's divided among the heirs. For people who are neither citizens nor residents of the US ("nonresident not a citizen," in IRS language), it applies to assets located in the US: real estate, shares of US companies and some other assets.
The difference compared with an American is huge:
| Situation | Exemption in 2026 | Source |
|---|---|---|
| US citizen or resident | $15 million | IRS, 2026 |
| Nonresident non-citizen (for example, a Brazilian living in Brazil) | $60,000 ($13,000 credit, not indexed for inflation) | IRS, Form 706-NA instructions, Sept 2025 |
According to the IRS instructions, if the US assets exceed $60,000, the executor must file Form 706-NA within 9 months of death. The rate table is the same one Americans use, from 18% to 40% (IRS).
Brazil isn't on the list of countries with an estate tax treaty with the US, which appears in those same instructions. In other words, there's no treaty to reduce the bill. If you're a resident of another country, check whether it's on that list.
A worked example
A $445,000 property, paid off, in the name of someone who lives in Brazil. Applying the IRS table ($70,800 + 34% of the amount over $250,000) and subtracting the $13,000 credit, the estimated tax comes to roughly $124,000, about 28% of the property's value. This is a simplification: debts, expenses and other rules change the number, and only a professional can calculate your case.
Ways to buy, in broad strokes
There's no single right structure for everyone. The table below summarizes the options most often discussed. It's a map for the conversation with your attorney, not a recommendation.
| Structure | US estate tax | Things to watch |
|---|---|---|
| In your own name (individual) | Subject to estate tax above $60,000 | Simplest and cheapest to maintain. On a sale, the gain follows the rules for individuals, and FIRPTA applies to the withholding. |
| Single-member US LLC | Generally does not protect on its own | By default, the IRS disregards a single-member LLC for income tax purposes ("disregarded entity") (IRS). When the owner is foreign, the LLC must still file Form 5472 every year (IRS, Form 5472). It helps separate civil liability, and many specialists take the view that on its own it doesn't take the property out of the estate tax. |
| Foreign (offshore) company owning the property | Shares of a company organized outside the US aren't considered US assets (IRS) | Pays US corporate tax on rent and on the sale. In Brazil, since 2024, the profits of a controlled company abroad can be taxed every year, even if not distributed (Lei 14.754/2023). There are setup, accounting and maintenance costs in both countries. |
| Trust or life insurance | Depends on how it's set up | These are custom solutions. Life insurance, for example, is used by some families to have cash to pay the tax. Requires a specialized attorney. |
Two honest notes:
- Financing changes the picture. Many banks that lend to foreigners require personal guarantees or have their own rules for LLCs and foreign companies. See how financing works for foreign buyers, always subject to the bank's approval.
- The structure has to exist before the purchase. Transferring the property later can trigger costs, transfer taxes and, in Brazil, capital gains.
And in Brazil: ITCMD on assets abroad
On the Brazilian side, inheritances pay ITCMD, the state tax on inheritances and gifts. For years, Brazilian states couldn't charge this tax on assets abroad because there was no complementary federal law (STF, Theme 825). That changed on January 13, 2026, with Complementary Law No. 227/2026. It regulated the tax on assets, rights and structures abroad and made rates mandatorily progressive (Demarest, Jan 2026).
The cap is still the one set by the Senate, currently 8%. As of March 2026, eight states, including São Paulo (4%) and Minas Gerais (5%), had not yet updated their laws to progressive rates (Tersi Advogados, Jul 2026). Each state has to pass its own law, so the rate in your case depends on the state and the date.
In practice, inheriting a Florida property can be hit by two taxes: estate tax in the US and ITCMD in Brazil. Whether and how one offsets the other depends on the state's law. That's a question for an attorney, not for a real estate broker.
Checklist before you sign the purchase
- [ ] I added up everything I own in the US (property, US stocks, brokerage account) to see how much exceeds $60,000.
- [ ] I talked to a tax attorney in the US about the structure (own name, LLC, foreign company, trust).
- [ ] I talked to an attorney or accountant in my home country (in Brazil: ITCMD, Law 14.754 and reporting the property). See reporting US property on your Brazilian tax return.
- [ ] I confirmed with the bank that it will finance the structure I chose.
- [ ] I decided who will hold the property and how the heirs will get access to the documents.
Rui doesn't give legal or tax advice. His role is to help you buy well and set up the purchase in the format your attorney decides, working with the title company and the bank.
FAQ
Do Brazilians pay estate tax on US property?
Yes, if they're neither US citizens nor residents and their US assets exceed $60,000. Rates run from 18% to 40%, and Form 706-NA must be filed within 9 months (IRS). In Brazil, ITCMD may also apply.
Does buying the property through an LLC avoid estate tax?
Generally, no. The IRS disregards a single-member US LLC for income tax purposes, and many specialists take the view that on its own it doesn't take the property out of the estate tax. People looking for protection usually consider a foreign company, a trust or insurance, always with an attorney.
Is it worth setting up a foreign company to buy the property?
It depends on the amount, your goals and the costs. The company can reduce estate tax, but it pays US corporate tax and, since Law 14.754/2023, its profits can be taxed every year in Brazil. For a smaller property, the cost of the structure can outweigh the benefit. Consult a tax attorney in both countries.
Is there a Brazil–US treaty to avoid double taxation on inheritances?
No. Brazil isn't on the list of countries with an estate tax treaty with the US (IRS, Form 706-NA instructions).
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