US Resident Alien - Canadian Inheritance over $100,000

scarter · Post by **scarter** » Tue Apr 17, 2012 4:29 pm

I am a Canadian Citizen, US Resident Alien / taxpayer who is inheriting approximately $200,000 - $215,000 from canada. I am receiving $90,000 from mom's RRIF account this month and the balance of real estate & investments will go into estate for probate/taxes etc. Since US allows a $100,000 gift / year, does it benefit me to only take the $90,000 this year and the balance in 2013? Will I only pay taxes on balance above the $100,000 gift threshold? Will they be deducted in Canada or due on US tax return?

lanman2000 · Post by **lanman2000** » Fri Apr 20, 2012 11:40 am

you fill out a form 3520 for the foreign inheritance when it's over 100,000 in a tax year. No US tax is owed. Canadian taxes will be paid by your mom's estate.

nelsona · Post by **nelsona** » Fri Apr 20, 2012 12:13 pm

US allows unlimited gifts from foreigners, not $100K limit. As lanman says, only gifts over $100K must be reported on 3520, but this brings no US tax.

scarter · Post by **scarter** » Fri Apr 20, 2012 11:29 pm

Thank you. This is reassuring to know US won't tax my inheritance. If I understand correctly, it seems that Canada will only withhold the 25% non-res tax on the gains my mother's estate makes from date of death until money is transferred to me. Is this correct?

nelsona · Post by **nelsona** » Fri Apr 20, 2012 11:36 pm

No. It depends what gains YOU make. The estate is still Cdn until you take it, so will be subject to Cdn tax as such, only once it is yours, then the money YOU make might be taxed in Canada, but not interest, and not cap gains except on property.