U.S. Stocks in a Korean Brokerage Account Are Still Exposed to U.S. Estate Tax

Your parents in Korea buy Apple stock or a U.S.-domiciled S&P 500 ETF through a Korean brokerage. No U.S. address, no U.S. account — so most families assume U.S. tax law can't reach those shares.

Legally, it can. Shares of a U.S. corporation are U.S.-situs assets for U.S. estate tax purposes, no matter where the account sits. For someone who is neither a U.S. citizen nor domiciled in the U.S., only $60,000 is shielded; above that, rates run up to 40% and a Form 706-NA return comes due. That threshold has not moved in decades, and Korea — unlike the U.K., Japan, or Germany — has no estate tax treaty with the U.S.

And this is not an edge case. Korea Securities Depository figures reported in early October put Korean investors’ U.S. stock holdings in its custody at about $200 billion — the scale of the “Seohak (westbound) ants” boom, as Korean media call the retail investors piling into U.S. stocks.

Whether the IRS ever finds out depends on where the shares are held. At a U.S. brokerage, a custodian handling a deceased non-resident's shares may require an IRS transfer certificate before releasing them. The certificate confirms that the estate tax has been discharged or provided for. Inside a Korean brokerage, the shares usually sit in an omnibus custody chain under the Korean institution's name, so there is typically no comparable U.S.-side checkpoint at death.

But unpaid does not mean resolved. While a required return goes unfiled, the clock for assessing the tax never starts. A special U.S. estate tax lien follows the property for ten years. Certain recipients can become personally liable, up to the date-of-death value of what they received. The exposure can surface when the family touches the U.S. system — a U.S.-person heir reporting the inheritance, shares moved to a U.S. custodian, or a later immigration plan.

Advance planning can change the outcome. What you buy, how you hold it, and lifetime gifting all matter. A non-resident can generally gift U.S. shares free of U.S. gift tax, unlike holding them at death. Korean gift tax and the recipient's carryover tax basis still have to be weighed.

If your family in Korea holds U.S. stocks or real estate — has the U.S. estate tax side ever been reviewed, or only the returns?

First published on Daniel Yoon’s LinkedIn on November 3, 2026. View on LinkedIn