Inheriting an Annuity (IRA) from the US

[Northern Dancer]

My father, a Canada-US dual citizen, passed away at age 93. He was resident in Canada and his estate is being administered in Canada. Most of his assets were Canadian. I am a Canadian citizen, resident in Canada (not a US citizen nor resident).

I am the beneficiary of an annuity (IRA) that Dad had in the US. This asset is only a small part of my inheritance.

My Goal: It’s not to maximise my money from this asset, but to avoid having to deal with the US tax system (I have no other US income or assets). I'm wondering if the annuity goes through the Estate -- instead of directly to me -- if the Estate would deal with the US tax instead of me and I would have no need to file in both countries.

My Choices: I can accept the annuity from the annuity company. (In that case, I would choose the lump sum payout option – I don’t care that that’s not cost-effective). Alternatively, I can decline the annuity and it would default to the Estate.

My Questions: I’d like to know as regards US taxation:

(1) If I decline the annuity and it goes into the Estate:

(a) Would the Estate be responsible for all US taxes and reporting regarding it?
(b) Would the US consider any money I receive from the Estate as a result of this to be my US source income, for which I would have to file US tax?


(2) If I accept the annuity directly from the annuity company:

Would the estate be responsible for all US taxes and US tax reporting for the annuity up until the date of dad’s death, or would I be?