General Parnership and Inheritance Taxes

[Gian Piero Bandieramonte]

Hi,

As I understand, the inheritance tax that a foreigner has to pay to inherit a property from another foreigner is 40% from the excess in the market value of $60k of the inherited rental property located in the US.

To mitigate this low exemption compared to US citizens, I am thinking of establishing a general partnership. Why? Please consider this example to express my point:

Let's suppose the rental property is purchased for $200k by 2 foreigners in a general partnership. They both are spouses and my parents. For simplicity, let's assume that on the moment of inheritance the property's market value is unchanged.

When the 1st of them dies I would inherit 50% of their share in their partnership, that is, $100k of the property's value. I would have to pay an inheritance tax out of the excess of $60k from that 50% share. That is, I pay 40% out of $40k = $16k.

Then I would become the new partner together with my surviving parent, owning 50%-50%.

When the 2nd of my parents passes away, and I get to inherit the 2nd half of the rental property, would again an exemption of $60k be applied on their 50% share of the partnership? That would make a total exemption of $120k. The total inheritance tax would be $32k.

This is in contrast to having to having one of my parents purchase the property as a sole proprietorship, where at the moment of death, a single exemption of $60k would be applied, making it an inheritance tax of 40%($200k - $60k) = $56k. The savings from the general partnership from inheritances taxes would be $24k.

Is this legally possible?

I could not find this info clearly anywhere on the internet.

Thank you.