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Debra, Lawyer
Category: Canada Law
Satisfied Customers: 101418
Experience:  Lawyer
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My Mother is 90 yrs old living with my sister 70 yrs old in

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My Mother is 90 yrs old living with my sister 70 yrs old in Canada.
My mother owns her condo outright and intends to leave the property to both my sister and myself. My citizenship is US but my birth was registered in Canada 1951.
I live in california and have not yet requested a canadian passport or Citizen ID card.
My concerns are mostly about taxes with regards XXXXX XXXXX sale of my Mother's property.
For example if we sell the condo will I be able to bring canadian dollars to the US ?
Am I better off not applying for a Canadian citizenship card? If I leave the proceeds from the sale in a Canadian bank will I pay taxes ? Either US or Canadian?
Your question is currently on the Canada law list. I am a Canadian lawyer and can answer the Canadian aspects of the question.

However, there are US issues involved as well. So, I can move your question to the US list instead. But the US expert cannot answer the Canadian aspects to the question..

So, it may be that you could have me answer the Canadian parts and then you could start a new post for the US aspects of the question.

Let me know how you wish to proceed.
Customer: replied 4 years ago.

Please proceed with the answers that apply to Canadian Law.

Thank you

In Canada there is no inheritance tax.

That means that you and your sister will not have to pay tax in Canada on anything you inherit from your mother.

If any taxes are owing by your mother then the estate would pay the tax.

If the condominium is your mother's principal residence then when she dies there will be no capital gains tax to pay because there is an exemption for capital gains tax when the property is a principal residence.

So, the estate will not have to pay any capital gains tax on the condominium either.

If the condominium is not sold but instead transferred into your name and the name of your sister and you do not live in the condominium then later on when it sold there will be capital gains tax to pay if the property appreciates in value from the time you inherit it.

When you later sell the property you will be required to pay capital gains tax in Canada on the property. In fact, there will be a withholding tax because you are a non-resident. However, you will be able to file a tax return as a non-resident and if you end up having to have paid too much tax you will get a refund.

While I don't know the tax laws in the US what I can tell you is that you will never face double taxation in the US because Canada and the US have a tax treaty that prevents you from being doubly taxed.

So if down the road when you were to go to sell the condominium and you were taxed in Canada, you would likely be taxed in the US too but then you would get a foreign tax credit for any taxes paid in Canada to reduce or possibly eliminate the amount of tax you have to pay in the US.

Let me know if you need any further clarification.
Debra and other Canada Law Specialists are ready to help you
Customer: replied 4 years ago.

It sounds like that while my mother is still alive it would be prudent to keep the condo in her name. Otherwise we would be subject to capital gains for the time that both my mother continues to Live and the Condo appreciates. I believe my sister is possibly interested in either

a title change or a reverse mortgage. So Far I am opposed to both.

I do not want the value to be drained from the condo. Can you offer any positive upside to change title now?


Customer: replied 4 years ago.

Supposing that when my mother dies and I choose to let my sister remain in the condo, can you suggest some fair ways for me to be compensated?

For example : would she pay me some rent or give up her share of the inheritance if she stays there for years? any suggestions?

A fair way to deal with this would be for her to pay you 1/2 of fair market value rent and then both of you each pay 1/2 of the property taxes, condo fees etc.
Debra and other Canada Law Specialists are ready to help you

TThanks very much for the rating.

Please take the time to participate in the customer satisfaction survey as that will go into my record with the site.You will be sent an email with the survey in a couple of days.

And feel free to keep my name in case you need me again down the road. You can always put my name into the subject line the next time you post so that your question will stand out for me and I will answer it just as soon as I can.

Thanks and take good care!

Customer: replied 4 years ago.

Thanks Debra,

You're replys have been very helpful.

Debra and other Canada Law Specialists are ready to help you