My wife's mother passed away in November. She (the mother) had no US assets, only Canadian accounts - stocks, mutual funds and an RRIF. She was also not a US person (Canadian citizen and resident, no US connection). Some of the beneficiaries in her will are US citizens, and some are not US persons.
The executor is my wife, who has dual US/Canada citizenship and is a Canadian resident. On a personal basis she is fully up to date with US filing requirements (e.g., 1040, FBAR). She also included the estate accounts in her personal FBAR filing for 2011.
There are no trusts involved in the estate. The RRIF and a joint checking account passed directly to my wife outside the estate. My wife, as executor, sold all investments about three weeks after the date of death (as soon as she was approved as executor) and that money sits as cash, earning nothing. The only income the estate has received are the last CPP and OAS payments (income to her in the last year) and one or two late dividends. There was a bit of a capital loss in the investments from date of death to sale of the investments.
Question: are there any US filing requirements because the estate has a US citizen executor, or because there are some US beneficiaries? I am aware of the form 3520 personal requirement for my wife (for 2012) as she will eventually receive more than $100,000, though the other heirs will not. Anything beyond that?
Canadian estate with US citizen heirs and executor
Moderator: Mark T Serbinski CA CPA
Your mother in law was CND, her estate T3 return that has to be filed is CND the executor of her Estate is CND ( it is not youe wifes Estate she is the executor and resides in Canada) so its all CND filing only as far as the final T1 and T3 returns go.
Once the assets are distributed to Beneficialries they will be taxed first in the estate and capital will be distributed to the beneficaiaries even the ones in US will receive capital no witholding applies. Only if the Estate allocates income to the beneficiaries who are in the US do you withold tax otherwise nothing else.
You file the T3 when you finalize teh Estate and her final T1 and its done.
On your wifes side any income she now earns she reports on both sides as usual and must disclose all her assets via FBAR etc to US.
Once the assets are distributed to Beneficialries they will be taxed first in the estate and capital will be distributed to the beneficaiaries even the ones in US will receive capital no witholding applies. Only if the Estate allocates income to the beneficiaries who are in the US do you withold tax otherwise nothing else.
You file the T3 when you finalize teh Estate and her final T1 and its done.
On your wifes side any income she now earns she reports on both sides as usual and must disclose all her assets via FBAR etc to US.
JG