If you want to dollarize your assets and migrate to the United States, it is important that you know the differences between inheritance taxes in Brazil and the United States. It is correct to say that in the US taxation can reach 40% of the value of assets, but the exemption range is much higher than in Brazil.
Inheritance tax in Brazil
In Brazil, inheritance tax is known as Imposto de Transmissão Causa Mortis e Doação(ITCMD) and is applied on the transfer of assets and rights by donation or inheritance.
The tax rates may vary according to the state in which the deceased resided or the donor was tax resident, and the basis for calculation is the market value of the property or right transferred.
Some states, such as São Paulo, have rates as high as 4%, while others, such as Rio de Janeiro and Minas Gerais, have rates as high as 8%.
However, there are also exemptions and rate reductions provided by law, depending on the relationship between the deceased or donor and the heir or donee, for example.
In addition, there is also the cost of new deeds for the properties to be transferred, and the notary's fees if the inventory is made out of court, when there is an agreement between the heirs.
If an inventory is made in a judicial manner, there is still the payment of lawyers' fees on the amount of the inheritance, which is usually 5-20%.
The bureaucracy and slowness of Brazilian justice can make an inventory process long and costly, generating many annoyances for the parties involved, in addition to the process being expensive and difficult.
But what about in the United States?
The US Internal Revenue Service (IRS) requires federal estate transfer taxes to be reported and paid when the total value of assets exceeds $12.92 million.
In other words, the vast majority of people will be exempt from this type of federal real estate transfer tax.
But, as in Brazil, each state has its own rules and rates for transferring goods and real estate.
State Taxes: Inheritance Tax and Estate Tax
It is in the area of state taxes that there is the biggest difference between Brazil and the United States. Most US states do not collect Inheritance Tax or Estate Tax.
The Estate Tax is levied before the asset is passed on to the heirs, and the Inheritance Tax is levied after the transfer of assets, and is paid by the heirs in their natural persons.
States that levy Inheritance Tax
The Inheritance Tax is levied by Iowa (up to 10%), Kentucky (up to 16%), Maryland (up to 10%) Nebraska (up to 18%), New Jersey (up to 16%), and Pennsylvania (up to 15%).
States levying State Tax
The State Tax is levied by Connecticut (12%), District of Columbia (up to 16.0%), Hawaii (up to 20.0%), Illinois (up to 16.0%), Maine (up to 12.0%), Maryland (up to 16.0%), Massachusetts (16.0%), Minnesota (up to 16.0%), New York (up to 16.0%), Oregon (up to 16.0%), Rhode Island (up to 16.0%), Vermont (16.0%) and Washington (10.0% to 20.0%).
Tax for Americans and non-residents
An important piece of information is that this 12 million dollar exemption is only valid for US citizens or permanent residents in the US (which are the people holding a Green Card).
Don't destroy your assets, dollarize them!
Want to dollarize your assets and have the tax advantages of a US citizen?
Investing in the United States is one option for obtaining a Green Card, but it is not the only one!
You can use your professional experience to get a Green Card and save thousands of dollars to open your company in the United States and undertake in dollars.
Many professions are on the rise in the US.
Medicine, nursing, engineering, IT, dentistry, aviation...
Your profession can be a passport to America!
You may be eligible for a Green Card under the EB-2 category if you have a recognized degree, five years of professional experience, or exceptional or extraordinary abilities in your field in Brazil.
Want to know if you are eligible? Fill out our free resume analysis and we will get back to you as soon as possible.
