The Question:
A reader asked:
“I’m a Canadian and have a recreational property in the US. If I happen to get hit by a bus and die, what tax filings are involved? I understand that a US tax return is required on the sale of the property, but not sure about estate tax.”
Answer:
For “personal use” property (ie. not a rental property) you don’t need to file any ongoing returns until there is an actual sale of the property.
Should the reader happen to get hit by a bus, it would generally look as follows:
- Canada-side, you’ll file a Final Return, showing a deemed sale of the US property, along with a (likely) capital gain.
- US-side, there might be estate tax exposure (Depends on the size of the estate.)
Usual Disclaimer: This information is for general information purposes only, and deals with complicated and time-sensitive info that may not apply to your situation. Tax rules are always changing, and this information may not be current. Tax is complicated, this information is not tax advice, and don’t rely on this info to make tax decisions – Hire someone to help you.