US citizen buying house half interest from Canadian father

hyperion0001 · Post by **hyperion0001** » Fri Sep 25, 2015 9:00 am

I've read many of the posts here and they have been very informative. Thank you.
I am a US citizen. My father has half interest in his home in Canada after my mother died leaving her half to the kids. I'd like to "purchase" my father's half, give him some fraction of the money, then have him "gift" the rest back to me to pay most of the mortgage. I don't see this as being very complicated. However, I probably should get some professional help - I'm just not sure what kind I need. For example, should I hire an accountant? an estate lawyer? should they be US or Canadian?.. etc.

nelsona · Post by **nelsona** » Fri Sep 25, 2015 12:37 pm

Not really much of an issue.
Your father can gift as much as he wants to you, and there are no gift or estate tax issues for either of you.

If he gifts you more than $100,000 you must report it on form 3520, as a foreign gift; no tax.

The half of the house would be come part of your foreign holdings, so you may have to deal with FATCA form on this.

I assume this is not a revenue property, so there would be non rental income to worry about.

At time of sale (you selling your half), this would be considered a sale by a non-resident, so there would be a couple of Cdn forms to fill out before sale, and some tax withheld, and a cdn tax return for that sale only that year.

hyperion0001 · Post by **hyperion0001** » Fri Sep 25, 2015 1:36 pm

Thank you for responding.
Regarding getting a mortgage at a Canadian bank, if my father's intent is to gift most of the money back to me and then for me to pay back the bank, do you know if this would make the mortgage any easier to acquire?

nelsona · Post by **nelsona** » Fri Sep 25, 2015 3:03 pm

What would be the point? Is the house paid-off? Does he need cash?