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U.S. Estate Tax for Canadians in 2013

Understand Your Exposure

Did you know that Canadians who die owning U.S. assets – such as stock of a U.S. corporation, a yacht in Florida, or a ski chalet in Colorado – may be subject to U.S. estate tax even though they are not U.S. residents, citizens or green card holders?

In 2013, you may be exposed to U.S. estate tax if you meet BOTH the following thresholds:

  • If your U.S. assets are valued at US $60,000 or less upon your death, then you will not be subject to U.S. estate tax regardless of the value of your worldwide assets.
  • If the value of your worldwide estate is US $5.25 million or less upon your death, then you will not be subject to U.S. estate tax regardless of the value of your U.S. assets.

 

Therefore, if the value of your worldwide estate is greater than US $5.25 million upon your death (all assets regardless of where they reside!), and the value of your U.S. assets at that time is greater than US $60,000, then you may be subject to U.S. estate tax. A calculation is required to determine whether U.S. estate tax would be levied.

The topic of US Estate Tax for Canadians is too complex to summarize in one Tonic article. We have a 16-page article, available at www.susangottlieb.com, which addresses the following questions:

  • How do I assess whether I have exposure to U.S. estate tax?
  • Which assets are subject to U.S. estate tax for Canadians?
  • Which assets are not subject to U.S. estate tax for Canadians?
  • If I have exposure, how do I estimate what my U.S. estate tax liability will be?
  • How can I minimize my exposure to U.S. estate tax?
  • Does my estate need to file a U.S. estate tax return after I die?

In addition to answering these questions, the full report highlights some common estate planning strategies to help minimize or eliminate your US tax exposure.  RBC also has a U.S. estate tax calculator which can assist you in estimating possible exposure to U.S. estate tax.

This article is not intended to provide legal or tax advice. Speak to a professional cross-border advisor specializing in tax and estate planning before acting on any of the strategies discussed in this article to ensure your specific circumstances are taken into account.

 

 

Susan Gottlieb CIM, FCSI, is a Vice President and Investment Advisor with RBC Dominion Securities Inc. Member CIPF, susangottlieb.com