U.S. Estate Taxation: Good News for Canadians Owning Real Estate In the U.S.

We are constantly asked about the impact of Canadians owning real estate in the U.S. The U.S. Congress recently passed “The American Tax Relief Act of 2012”. This legislation eliminates estate and gift taxes for most U.S. taxpayers and impacts Canadians with assets located in the U.S. The combination of the new legislation and the Canada-U.S. Income Tax Convention effectively eliminates U.S. estate tax for Canadians provided their worldwide estate is less than $5 million USD. If a Canadian worldwide estate is greater than $5 million USD all is not lost as there are estate planning strategies to eliminate or reduce the tax otherwise payable.

This is not intended to provide legal advice but to bring to your attention some relevant U.S. legislation. Readers should consult with their professional advisors to determine the applicability of the legislation to their situation.