I know this is complicated but here goes: I am a dual citizen (US/CDN) resident of Canada. A relative just passed away in the US-- I am one of 3 trustees of a small trust (about 800K in assets) that includes real estate. The trust will likely be split and liquidated over the next few years.
I know there's no inheritance tax in Canada but I have a few questions--
1) does the real estate become a "deemed disposition" upon the relative's death that I must pay cap gains on in Canada? If so, is it only when the property is sold?
2) If there are 3 trustees with only one living in Canada, can CCRA declare the trust a "Canadian Trust" even though it exists in US?
3) Suggestions for paying the least amount of tax if there is any...?
U.S. trust question!
Moderator: Mark T Serbinski CA CPA
***BUMP***
Is there anyone qualified in this field to answer?!
I don't know the answers to your questions, as they seem to be mostly about Canadian tax law. However, you should note that from a U.S. tax perspective the trust may be considered a "foreign" trust if you as a trustee are located in Canada. If this is the case, the trust would likely have U.S. tax filing requirements -- seel Form 3520 and 3520A.