US resident lets relative live rent free in inherited Ontario Canada property. Tax consequences?

[jrosser]

I am trying to figure out whether there will be any US tax consequences in the following proposed course of action:

House in Ontario will be inherited by four siblings. One sibling is the US resident. Another sibling is the full time caregiver for the matriarch of the family and also currently lives rent-free in the dwelling and it is the desire of the remainder of the siblings that the caregiver be able to continue to stay rent-free in the family home after the passing of the matriarch.

[nelsona]

Your inheritance of 1/4 of the house is reportable as a foreign gift on Form 3520, if it is over US$100K. No tax, just report.

The fact that you let the sibling live in the house is of no consequence. You are not giving it to them. Owning the property does not make you Cdn resident in any way.

When that sibling sells (or dies) you may be taxable on 1/4th of the gains between your mother's death and the sale, in both countries.