My_question_is: Applicable to both US and Canada
Subject: Inheritance Tax
Expert: taxman at centa.com
Date: Wednesday February 08, 2006
Time: 11:50 PM -0800
QUESTION:
If a Canadian Citizen/Resident parent leaves an inheritance to a child
residing in US, would there be any tax obligatins on either side of the
border?
===========================================
david ingram replies:
As long as the Canadian is NOT an American citizen, there should not be any
direct tax consequences of an inheritance or gift to the US resident.
However problems do arise (US or Canada beneficiary) when the deceased has
an estate that consists of (for example) $300,000 cash plus a couple of
$300,000 rental condos that were bought in 1982 for $40,000.
Dad leaves the condos to specific individuals and the cash to someone else
thinking it is equal. However, the deceased's final tax return deems the
condos to have been sold and repurchased at fair market value at the moment
of death. That means that there could be $100,000 of Capital gains and
recapture tax on the condos. The tax comes out of the cash leaving that
beneficiary short changed. It is really important to cover these situations
in the will.
The lawyer who looks after this should have significant experience dealing
with cross border estates to understand what is necessary in the will. One
such lawyer with Manitoba and BC experience is David Stoller in West
Vancouver. He is extremely thorough and might be described as "picky". You
can call him at (604) 922-4702 for a reference to someone near you.
-------David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week (please do not fax or phone
outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>
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