Comments on: U.S. Estate Tax changes will affect Canadians

By: The growing problem with Canadians owning U.S. property - Thicken My Wallet

The growing problem with Canadians owning U.S. property - Thicken My Wallet — Thu, 20 Jan 2011 09:03:16 +0000

[...] least provided some much need clarity to Canadians owning U.S. property (the original problem with Canadians and U.S. estate tax summarized by Canadian Capitalist). The quick and dirty being starting in 2011, the basic exemption [...]

By: Gail

Gail — Tue, 23 Nov 2010 20:36:37 +0000

How does a Canadian purchasing property in Arizona protect themselves from paying Estate Tax??

By: Why I Prefer US-listed ETFs | Canadian Capitalist

Why I Prefer US-listed ETFs | Canadian Capitalist — Thu, 21 Oct 2010 14:32:20 +0000

[...] The fees involved in exchanging currency isn’t the only drawback to US-listed ETFs. US-listed ETFs such as the popular Vanguard VIPERs are considered US located property and might be subject to US Estate Taxes. [...]

By: Thicken My Wallet » Blog Archive » Do dividend tax cuts actually promote dividend increases?

Wed, 02 Jun 2010 08:43:25 +0000

[...] eyes roll but it eventually has consequences to you and I. Much like there is much uncertainty in U.S. Estate taxes due to Congress fighting for the sake of fight, the dividend tax cut of 2003 in the U.S. is set [...]

By: Week in Review – April 17–24 » 1stmilliondollar.net - A financial journey to our first million dollar

Sun, 25 Apr 2010 12:55:01 +0000

[...] Canadian Capitalist explained on how US Estate Tax changes will affect Canadians. [...]

By: Kim

Kim — Thu, 22 Apr 2010 15:12:32 +0000

@Sasanam – true, but do you know exactly when your time will be up? Who knows, you could get hit by a bus tiomorrow.

By: Sasanam

Sasanam — Wed, 21 Apr 2010 20:34:11 +0000

Woudn’t estate tax comes into effect at the time of death? So, we wouldn’t have to worry until then don’t we

By: Canadian Capitalist

Canadian Capitalist — Wed, 21 Apr 2010 17:56:19 +0000

@Kim: I’m given to understand that US property might simply be frozen until estate declaration is filed. I’m not entirely sure how this would work for US stocks held in Canadian brokerage accounts but it seems plausible to me that assets will be frozen until reports are filed with various jurisdictions. In any case, this is something to be aware of and adjust holdings if US estate taxes threaten to be a huge issue.

By: Kim

Kim — Wed, 21 Apr 2010 15:19:58 +0000

@ CC: re your comment about the IRS collecting taxes – because the ETFs are based in the US (managed by US companies, authorized participants are US companies), my guess is that the IRS could simply seize the US based ETF shares owned by the Canadian and require the US ETF manager / APs to sell the seized shares and forward the proceeds to the IRS.

By: Canadian Capitalist

Canadian Capitalist — Wed, 21 Apr 2010 14:22:45 +0000

@DM: We don’t own any US real estate but we do own US-listed ETFs (mostly VTI, VEA and VWO) in our RRSPs and non-registered accounts. It is not clear to me if US property held in a RRSP account is exempt from US Estate Tax calculations. I’m guessing not because I didn’t find anything that said it did not.

Like I mentioned in my previous comment, I’m not sure how the IRS is ever going to successfully audit estates of non-resident aliens with modest amounts of US property. In any case, this is something to keep in mind as our portfolios grow larger and we own significant amounts of US property.

For instance, a Canadian owning more than $1 million worth of US stocks would be liable for estate taxes because even assuming that he owned no other assets, the US property alone would exceed the exemption limit. I have no idea how the IRS will collect US Estate Taxes owed by Canadian estates that happen to own some US stocks.