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Question

I am a canadian citizen but a legal permanent resident of the U.S. I am to inherit my parents home after they pass on through a joint tenancy agreemnt. I have been told by Canandian lawyers that their is no capital gains tax on a primary residence in Canada. What taxes would I be liable for in the U.S. I would be destributing the funds from the sale of the property amongst five siblings all living in the U.S. I understand that I could gift up to $13,000 each year per person tax free. But what taxes would I be liable for if they were each paid their lump sum all at once? I am guessing the property is worth about $250,000.

Submitted: 274 days and 20 hours ago.
Category: Estate Law
Value: $15
Status: CLOSED
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Location: United States, California

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I have done a lot of online research. I currently have a Canadian attorney, but am trying to clarify the U.S. laws

Posted by lwpat 274 days and 20 hours ago.

Answer

If you intend to sell the property, put it into an irrevocable trust. That way the property can be sold and the money split without any taxes except for estate taxes. Not sure how the property is currently titled but you will need to get the property back in your parents name and then into the trust.

274 days and 20 hours ago.

Reply

That didn't answer my question. My question was what type of taxes will I have to pay if I keep the property in Joint Tenancy? Will I have to pay capital gain taxes in the U.S. even though their are none in Cananda since it is a Canadian property? I will be disbursing the money of approximately $250,000 five different ways.

Posted by lwpat 274 days and 20 hours ago.

Answer

You will not have to pay any capital gains taxes since the property is coming directly to you. Currently US citizens only have to report foreign gifts in excess of 100,000. See form 3520 part IV

 

http://www.irs.gov/pub/irs-pdf/f3520.pdf

 

That is subject to change anytime.

274 days and 20 hours ago.

Reply

Okay but I am a Canadian citizen living in the U.S.legally and the property value in my name will be valued at around $250,000 which I will disburse five ways, so that would not be taxed in the U.S?

Accepted Answer

Currently no.

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Expert: lwpat
Pos. Feedback: 98.7 %
Accepts: 
Answered: 2/20/2009

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Practicing attorney with extensive experience in wills, estates and trusts

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