Income taxes having been a resident alien and moving back to Germany

[Gesche]

Hello,

I am trying to figure out what taxes need to be filed for my parents.

my parents lived in the US for 11 years and filed taxes there until moving back to the US. They got a green card 2 years before moving back to Germany in 2012. My father died in 2014. My mother send back their green cards in 2016, but there is no paperwork that proves that the status was officially surrendered. My parents paid taxes in Germany and were citizens of Germany. My mother died in 2024. My father got employment at a US company 2 month before he died. 
Do I need to file taxes for all or just some years after the move?

my mother had ira s in the US and my parents had a joint savings and checking account the interest so far did not seem to be over 10 dollars a year thus far. 
can you also tell me if a 706 or 706 NA would have needed to be filed for my dad? 
seems a lot of effort and money to file when the treaty benefits cause no taxes to be due anyways. 

I would really appreciate an answer since it is hard to find an expert on this in Germany who I can trust, seems the more people I ask the more different answers I get.

many thanks,

Gesche

[DaveF1006]

It depends. Let's break this down and discuss each issue individually.

1. Filing Taxes for Your Parents.

• Residency Status and Tax obligations. Since your parents held green cards, they were considered US tax residents until they officially surrendered their green cards. Even without proof, staying outside the country for a period of time without a re-entry permit is usually considered giving up permanent resident status. You may wish to check this fact with an immigration official.  

      2. Years to File:

• For your father: Since he passed away in 2014 and had U.S. employment shortly before his death, you would likely need to file a U.S. tax return for 2014. If he earned income in 2013, a return for that year might also be required.
• For your mother: If her green card wasn't officially surrendered until 2016, she may need to file US tax returns for the years 2012–2016. After 2016, if she no longer had US residency status, she wouldn't need to file US taxes unless she had U.S.-sourced income from the IRA or interest from the  bank accounts.

      3. Bank Accounts and IRAs 

• The interest from the joint accounts is minimal, but it should still be reported if a return is required. 
• Distributions from the IRA would be considered U.S.-sourced income and subject to US tax, even if your mother was no longer a US resident.

• In regards to form 706, if your father's estate was worth less than $5.12 million in 2012, then a Form 706 or 706 NA does not need to be filed.  If required to file, the form needs to be filed within 9 months after his death.

Frequently asked questions on estate taxes