US citizen/Canadian resident inheriting from US

margitdastl · Post by **margitdastl** » Thu Jan 30, 2014 1:38 pm

I am a US citizen and a permanent resident of Canada. I am 35 years old. My father (lived in US) recently passed away and I will be inheriting about $300k (before US taxes) in a few months.

US taxes will be withdrawn from this sum before it is dispersed (I am 1 of 4 beneficiaries), but I was wondering what the best way is to bring the money to Canada to minimize taxes. Should I take the lump sum (I'd prefer this)? Or would it be best to keep the principal in a US bank and take $10k per year (or something like that)? Is there an advantage either way with respect to Canadian taxes?

nelsona · Post by **nelsona** » Thu Jan 30, 2014 2:11 pm

What US taxes are going to be withheld?
What will the inheritance consit of? Cash, a retirement account?

Canada will not tax any of this if it is cash. Canada taxes INCOME, not holdings.

margitdastl · Post by **margitdastl** » Thu Jan 30, 2014 2:19 pm

My grandfather had set up several trusts that my aunt, my sisters, and myself are in the process of dissolving. There's also my father's house, which one of the trusts now owns, that we are in the process of selling. We have a US accountant taking care of the US side of things. I've been told that any US inheritance/other taxes will be taken from the bulk before we divide up the cash.

I didn't know if there would be any Canadian inheritance taxes or penalties that I needed to worry about, but it makes sense that Canada would only tax my income. Thank you!