Cardinal Point’s Terry Ritchie continues his talk with Rob Carrick about U.S. estate taxes; this segment focuses on what they mean to Canadians who own U.S. stocks and ETFs. U.S. shares owned by Canadians are considered U.S. cited, and there could be U.S. estate tax filing requirements if they are valued at more than $60K (USD) upon death. If that’s the case, a U.S. estate tax return, IRS Form 706 NA, should be filed. The problem is that the full value of the worldwide estate must be disclosed, even though the Canadian is responsible to the CRA, not the IRS. Otherwise, some transfer agents may not distribute those U.S. shares through probate.
Ritchie then discusses how much money Canadians would need in estate to worry about estate taxes. If the Canadian has less then the $5.25M exemption ($10.5 for married couples), then there is no U.S. estate tax exposure. It’s a matter of filling paperwork, but not owing taxes.
What if a Canadian owns American stock indexes listed on the TSX? It’s not an issue, but if you buy the comparable version from a U.S. provider traded on a U.S. exchange, those are considered U.S.-cited and would be part of a U.S. estate tax valuation.