Living in US, received inheritance in Canada

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optism
Posts: 21
Joined: Thu Mar 10, 2016 5:44 pm

Living in US, received inheritance in Canada

Post by optism »

Hello,

I am a Canadian citizen living in U.S as a permanent resident. A relative in Canada died in 2018 and I received an inheritance. Due to the time gap between this relative's death and the time I received the inheritance, there were investment gains on the estate account. I've since received T4A and T4RIP form from Canada to account for those gains.

So my questions:

1. Do I need to complete a Canada tax return this year to report the T4A and T4RIP?

2. I assume I need to report these on my U.S return. Can you advise how/where to report them?

3. I also assume I will report the inheritance on the U.S return but that this will be tax free.

Thanks in advance,

Mike
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Living in US, received inheritance in Canada

Post by nelsona »

The income will be reportable on your US return, based on the types of income: cap gains, dividend, etc. If the inheritance is over 100K, it needs to be reported on form 3520, not taxable, as you say.

For Canada, whether it needs to be reported will depend on the income, and whether correct non-resident tax was withheld. Judging for the slips you got, I would say they were not correctly withheld, as they should be NR-4 slips. Generally the types of income on T4A are either flat taxed (dividends) or non-taxable (cap gains and interest) for US residents. In neither case would a Cdn return be filed.

I don't know what a T4RIP slip is.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
optism
Posts: 21
Joined: Thu Mar 10, 2016 5:44 pm

Re: Living in US, received inheritance in Canada

Post by optism »

Hi Nelson,

Thanks for all the information provided below. Very helpful.

For form 3520, can you advise on what section I would fill out for an inheritance? It looks like Section IV (gifts or bequests) but could fall under Section III (beneficiary of trust).

Thanks again.
Jack475
Posts: 2
Joined: Sun Jan 15, 2017 1:47 pm

Re: Living in US, received inheritance in Canada

Post by Jack475 »

4. You are a U.S. person who, during the current tax
year, received either:
a. More than $100,000 from a nonresident alien
individual or a foreign estate (including foreign persons
related to that nonresident alien individual or foreign estate)
that you treated as gifts or bequests; or

Complete the identifying information on page 1 of the form
and Part IV. See the instructions for Part IV.
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