death, taxes and filing requirements

[rafa02]

Anyone have experience with IRS filing requirements for a Canadian estate? If I understand correctly, the death of a taxpayer automatically creates an estate, which is a trust, of some sort. I do not know, but I expect this would require the filing of a 3520 and perhaps a 3520A.

I currently have designated my adult children as executors, but I found one post by nelsona advising against such an arrangement; I am thinking if my estate would require a 3520(3520A?), how much more costly to have these forms filed for my executors. When I look at possibly using a professional as executor, this could amount to 5% of the value of the estate, which could instead pay for quite a bit of tax preparation.

[nelsona]

It is best to use non-US executors.

[cammy7]

I am a dual citizen living in Canada. My father is Canadian citizen who passed away. As an executor why are financial citizens and lawyers asking my citizenship. There should not be any reporting to the US should there be - he is Canadian, all his assets are in Canada, and I live in Canada. Distributions are all for Canadian residents.

[nelsona]

Since you must file a US tax return, you will also need to file a Form 3520, reporting the foreign inheritance. Not for tax purposes, for foreign trust purposes, if the total inheritance is more than US$100k.

[ND]

cammy - if dad owned US stocks as many Cdns do, that's US situs property and subject to US estate tax but with treaty exemption allowance pro-rata for Cdns. US situs/worldwide assets

[sk8man]

Yes, if you have U.S. assets in a Canadian estate, you’ll likely need to file Form 3520 and maybe 3520-A. A professional can help avoid mistakes and penalties, but if cost is a concern, compare the fees of a pro executor versus tax prep costs.