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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13626
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am a Canadian resident and citizen. My daughter is a permanent

Customer Question

I am a Canadian resident and citizen. My daughter is a permanent resident of Canada and has US and Canadian citizenship. My son is a Canadian citizen and permanent resident of Canada.
I own a co-op apartment in North Carolina in which I have a share certificate in the corporation.
I plan to leave the apartment/certificate to my daughter and son in my Will.
1) Do I have any income tax liability for this transfer on death? ( I file a 1040NR for my pensions
2)Are there any taxes such as gift taxes assessed to my daughter or son?
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Robin D :

Hello and thank you for using Just Answer,
The US?Canadian tax treaty covers you as long as your worldwide holdings are not more than $5mil. A Canadian citizen whose worldwide estate is less than $5 million is not subject to US estate tax, no matter how much property has a US situs. See Article XXIXB2 of US-Canada Treaty.
Even if a Canadian citizen’s worldwide wealth exceeds $5 million, there is no US estate tax if US situs property is less than $60,000. Code Section 2102(b)
If the above fits your estate situation then your estate would not pay tax when you are deceased.
Your daughter would need to report any bequeath that she receives if the amount is over $100,000 (in value or cash). She would not be taxed but she would need to report using Form 3520. This would only be on her portion as she is a US citizen. Your son would not have a reporting requirement to the US as he is not a US person.

JACUSTOMER-49rqm0kb- :

The share certificate would be considered a non-tangible asset by the IRS?

Robin D :

The U.S. Internal Revenue Code s. 2104 states that "shares of stock owned and held by a nonresident not a citizen of the United States shall be deemed property within the United States only if issued by a domestic corporation". If the corp is a US corporation then the share certificate would be included in your US estate.