Inheritance tax

[Jrozzler 17]

So my finances comes from a very wealthy Canadian family and has a very large inheritance coming her way. Her parents talked with financial advisor and have decided the best decision financial is to take her off the will! They said we are going to be taxed in both places and lose a bunch of money. Etc. does anyone know how this works. Isn't America and Canada in a tax treaty? How do capital gains and foreign income tax work? Can't her parrents gift her money tax free?

[aaron2020 11,651]

The US would not tax a foreign inheritance. Her parents needs to talk to an estate planning attorney; not a financial advisor.

[Rc123rc 528]

I'd suggest getting hold of a U.S. tax consultant. This is probably way too complicated for something to answer here. Also, you're going to need expert advice to counteract the advice of the financial advisor saying to take your fiance off the will. Amounts, types and timing of the inheritance all are factors that need to be taken into account. I'm going to guess that receiving the inheritance while still residing in Canada will be one suggestion.

[aaron2020 11,651]

http://estate.findlaw.com/planning-an-estate/how-us-tax-rules-apply-to-inheritances-and-gifts-from-abroad.html

The Income tax treaty with Canada also includes articles that minimize the double tax previously caused when assets were subject to the Canada's deemed disposition at death tax which is a capital gains tax rather than a death tax.

As long as the decedent who transfers the asset by bequest or is neither a U.S. citizen nor a foreign national domiciled in the United States, no U.S. estate tax is imposed on the transfer. The United States does not impose inheritance taxes on the beneficiary's receipt of a bequest, therefore there is no U.S. tax resulting from the death transfer. Also, the United States also does not impose an income tax on inheritances brought into the United States. However, other U.S. reporting and tax rules may apply to the asset. - See more at: http://estate.findlaw.com/planning-an-estate/how-us-tax-rules-apply-to-inheritances-and-gifts-from-abroad.html#sthash.1DzkgRuD.dpuf

[Jrozzler 17]

Thank you all for the advice, I should state that her inheritance isn't going to be a sum of money rather property i.e. buildings that her family owns.if I'm not mistaking wouldn't she be doubly taxed because she would technically be owning property in Canada therefore having ties to Canada which qualifies her to be taxed by both countries?

[Lemonslice 4,841]

if I'm not mistaking wouldn't she be doubly taxed because she would technically be owning property in Canada therefore having ties to Canada which qualifies her to be taxed by both countries?

That's not how your Canadian residency status for taxation purpose is determined.

If they want to leave her something/if she wants to inherit, they should consult with an estate/tax planner.

[aaron2020 11,651]

Thank you all for the advice, I should state that her inheritance isn't going to be a sum of money rather property i.e. buildings that her family owns.if I'm not mistaking wouldn't she be doubly taxed because she would technically be owning property in Canada therefore having ties to Canada which qualifies her to be taxed by both countries?

Hire a good bi-national accountant to get the appropriate answers. An immigration forum is a bad choice to ask for advice on complex tax issues.

[Jrozzler 17]

Hire a good bi-national accountant to get the appropriate answers. An immigration forum is a bad choice to ask for advice on complex tax issues.

Ok thank you!

[Will & Malou 0]

Were you able to find an answer on your question. I have the same problem, only difference is that she is from the Philippines