U.S.-Canadian Tax and Estate Planning for Dual Residents

Description

The long Canada-U.S. border and extensive ties between the two countries provide a significant amount of economic migration for citizens of both countries. Many U.S. citizens and permanent residents have property interests in Canada and vice-versa. Estate planning counsel and advisers must be able to identify the tax and wealth transfer planning rules and opportunities specific to U.S. and Canadian citizens with assets and presence in both countries.

The differences between U.S. and Canadian estate and wealth transfer rules present several challenges. Canada does not impose an estate tax. However, Canadian law provides for a "deemed disposition" of all capital assets on the death of a taxpayer. This disposition triggers a tax on all unrecognized gains and losses of Canadian-sourced assets.

While the U.S.-Canada tax treaty allows for reciprocal credits for U.S. estate tax and Canadian taxes, estate planners must reconcile the differences between the two countries' tax regimes and proactively minimize the tax impact of wealth transfers. Tax advisers must thoroughly grasp treaty provisions, identify whether a client needs separate estate documents specific to each country, and recognize the U.S. and foreign income and estate/gift tax implications of transactions.

Listen as our expert panel provides guidance on how to plan the estates of clients with U.S. and Canadian tax presence, including interests in business entities, real estate, and financial accounts. The panel will cover the legal and tax considerations when planning for the disposition of each type of asset.