Ask Experts Questions for FREE Help !
Ask
    Friendly Canuck's Avatar
    Friendly Canuck Posts: 1, Reputation: 1
    New Member
     
    #1

    Sep 13, 2009, 09:21 PM
    Estate Taxes if Beneficiary is Out of Country
    I was wondering if anyone could help me.

    If in my will - I make my beneficiary or one of them a relative who lives in Canada
    What are the tax implications - is it different if I was leaving money to a U.S. CITIZEN
    (which I am).

    What about property - or a business - are those tax implications different.

    If anyone could help I'd appreciate it.
    ebaines's Avatar
    ebaines Posts: 12,132, Reputation: 1307
    Expert
     
    #2

    Sep 14, 2009, 07:18 AM

    I am assuming you are a US citizen. If your estate owes taxes (i.e. the value of the assets in your estate exceed the amount of the exclusion , which in 2009 is $3.5M), then your estate will owe taxes regardless of who the beneficiaries are, unless the beneficiary(ies) are your spouse or a 501(c)(3)charitable institution. It does not matter if the beneficiary is a US citizen or not, nor the nature of the asset (business, property, or cash - it's all the same). You may also have estate taxes from the state you live in - it all depends on where you live and where the property is located. This says nothing about whether the heir may owe inheritance taxes - that will depend on the state he/she lives in. I don't know about Canadian inheritance tax laws - sorry.

    If indeed the value of your estate is in excess of $3.5M, I strongly suggest that you consult with a qualified estate planner or attorney in your state - estate tax laws are very complicated, and if you make a mistake it can cost your heirs a lot of money, so it pays to get good advice for your particular situation. You should also be aware that the current law actually has the federal estate tax being abolished for 2010, but in 2011 it comes back with a much smaller exclusion ($1M). It's a mess, and this will probably all change in the near future, as congress is unlikely to let this stand as is.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,772, Reputation: 846
    Senior Tax Expert
     
    #3

    Sep 14, 2009, 07:56 AM
    ebaines:

    I wish I could share your position that Congress is going to change it, but there is every indication that Congress in fact WILL allow the situation stand as scheduled, i.e, have the estate tax "be abolished" for 2010, then be re-instated in 2011.

    The Democrats are spending money faster than the U.S. Mint can print it, and they have to get it from somewhere!
    ebaines's Avatar
    ebaines Posts: 12,132, Reputation: 1307
    Expert
     
    #4

    Sep 14, 2009, 10:35 AM
    Quote Originally Posted by AtlantaTaxExpert View Post
    ebaines:

    I wish I could share your position that Congress is going to change it, but there is every indication that Congress in fact WILL allow the situation stand as scheduled, i.e, have the estate tax "be abolished" for 2010, then be re-instated in 2011.

    The Democrats are spending money faster than the U.S. Mint can print it, and they have to get it from somewhere!
    If you're right then there will probably be a few cases of "throw Mama from the train" (or unplug Mama from the ventilator) come December 2010!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,772, Reputation: 846
    Senior Tax Expert
     
    #5

    Sep 15, 2009, 10:02 AM
    Had NOT thought of that, but you are probably right!
    Five Rings's Avatar
    Five Rings Posts: 459, Reputation: 7
    Full Member
     
    #6

    Sep 16, 2009, 10:49 AM

    I heard that Congessional intent points to 3.5M for estates and 1M for gifts in 2011.

    I heard it through the grapevine.
    (not much longer would you be mine
    Ohh, I'm just about to lose my mind)

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Beneficiary 401K in California-Taxes? [ 1 Answers ]

My mother passed away this month and my concern is her 401K's they are from 5 different companies and there is issues with death benefits I do not understand as a beneficiary in the state of California.My mom wishes for her 6 grandchildren to get this money but only 2 of us are the beneficiaries...

Beneficiary of Estate [ 2 Answers ]

If a person is a beneficiary of a Estate and has not been contact, do legal notices need to be posted to try and find the person? If so, what does one go about find the legal notices?

Estate Tax when beneficiary is Non-US citizen [ 3 Answers ]

As a non US citizen with a deceased spouse, how do I find out if the insurance money that I get is taxed through the estate tax? I know that if the amount I receive from the spouse exceeds 2,000,000 then it is subject to a 45% estate tax. Do my spouses different life insurance policies...


View more questions Search