Canadians owning U.S.-based assets, such as real estate or shares in U.S. corporations exceeding $60,000 USD, face the requirement to file U.S. estate tax returns—even under potential tax reforms by former President Donald Trump. While the U.S. estate tax exemption stands at $13.61 million USD for 2024 and will increase slightly in 2025, it is set to revert to roughly $7 million USD in 2026 without further legislative action.
Although estate tax applies mainly to the very wealthy, executors must still file a U.S. estate tax return to secure the release of U.S.-situs property. This includes properties like U.S. homes, shares of U.S. corporations, or U.S.-based pension plans. Failing to file can delay asset transfers by years and leave executors personally liable for taxes owed.
Terry Ritchie
Vice President and Private Wealth Manager
Cardinal Point Wealth Management
Terry Ritchie, Vice President and Private Wealth Manager at Cardinal Point Capital Management, highlights the importance of compliance, noting that delays in obtaining IRS transfer certificates can extend to two years or more. Strategies to mitigate this burden include investing in Canadian mutual funds with U.S. exposure, transferring U.S. shares to Canadian holding companies, or other tax-efficient structures.
Canadians with U.S. investments should plan proactively to minimize tax filing complexities for their heirs, ensuring compliance and preserving their financial legacy. For more detailed guidance on navigating these obligations, explore the full article for practical strategies and expert advice on managing cross-border assets.
