Hi Folks
I have searched everywhere..finished my taxes except for this nagging item. I live in the USA dual citizen Canada and the USA. My mother passed away and I received a $2,500 Death Benefit from the Canadian Government Lump Sum NR4 code 48. Do I have to reposrt this on my 1040 and if so how do I report it?
Thnak you for your assistance!
Kevin
NR4 Lump Sum Death Benefit
Moderator: Mark T Serbinski CA CPA
I'm assuming that, since you received the NR4, that the death benefit was not included on the estate tax return, and is thus taxable to you.
If that is the case, this is considered social security income, so should be reported as such (85% of it, as is the case for any social security income).
There should not have been any Cdn tax withheld (correct?), and you are a US resident. If there was, you need to apply to CRA to get that money back (NR-7 form).
If you have any carry forward of unused foreign tax credits (general category) you can use that against your US tax on the death benefit.
If that is the case, this is considered social security income, so should be reported as such (85% of it, as is the case for any social security income).
There should not have been any Cdn tax withheld (correct?), and you are a US resident. If there was, you need to apply to CRA to get that money back (NR-7 form).
If you have any carry forward of unused foreign tax credits (general category) you can use that against your US tax on the death benefit.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
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KevKiki286
- Posts: 3
- Joined: Tue Feb 18, 2014 12:12 am
Hi
Thank you for the quick reply. Appreciate it.
"I'm assuming that, since you received the NR4, that the death benefit was not included on the estate tax return, and is thus taxable to you. "
The NR4 lists my name and directly under it says "For the estate of Mrs (my mother).. " Not sure if that make a difference .
Also Nelsona..the NR4 says $2500 CDN but was paid thru a US bank and I received $2300 approx. on the exchange rate when cashing..so I just wanted to make sure for that 85 % rule I use this figure and not the original $2500 correct?
Thank you for your time .
Kev
Thank you for the quick reply. Appreciate it.
"I'm assuming that, since you received the NR4, that the death benefit was not included on the estate tax return, and is thus taxable to you. "
The NR4 lists my name and directly under it says "For the estate of Mrs (my mother).. " Not sure if that make a difference .
Also Nelsona..the NR4 says $2500 CDN but was paid thru a US bank and I received $2300 approx. on the exchange rate when cashing..so I just wanted to make sure for that 85 % rule I use this figure and not the original $2500 correct?
Thank you for your time .
Kev