Canadian/US taxes: inheritance,

QUESTION:
We're US citizens considering a move from the US to take jobs in BC. At some
point in the next 10 years or so, I may receive an inheritance from a
parent's estate in the US; I don't know how much. It is likely to include
mineral rights on family property which if we ever get lucky (haven't yet)
could result in sizable royalties from oil and gas. If so, would we be in
much worse shape tax-wise residing in Canada than in the US? So, there are 2
parts to my question: (1) inheritance taxes in general, and (2) taxes on oil
and gas royalties. Thanks!
-----------------------------------
david ingram replies:
Forecasting ten years in the future is a fool's game.  And dealing with an
oil and gas play and what might happen is even more foolhardy.  I can tell
you that when "my" mother died leaving a small oil and gas possibility, I
looked at the paperwork with an American brother and sister and a Canadian
brother and sister, and renounced any claim to the money because I did not
want to do the paperwork and I figured (I was right as it turns out 18 years
later) my share would not possibly be enough to reimburse me for the
paperwork I would be expected to do.
Canada has NO inheritance taxes and would not put any tax on the corpus of
an estate you inherited from a resident  of the US if the property was
located in the US.
The US will tax you a maximum of 15% (under the Treaty) on any royalties
paid to you in Canada and Canada will tax you at whatever your marginal tax
rate is in Canada and then give you a dollar for dollar credit  for the
taxes paid to the US.
After that, it depends.  For instance, (forgetting about exchange) if you
are self-employed, single and earn $100,000 Cdn in West Vancouver, the
richest postal code in Canada, you will need $120,000 US to stay even in San
Francisco with the California and US Federal taxes and Social Security taxes
being higher than the equivalent taxes in Canada and the other cost of
living being materially higher in the US other than milk, cheese, gas and
turkeys.
If you are a single wage earner but filing as a married couple, your tax
will be slightly lower in California.  So, it "depends."
And the same is true between Calgary, Alberta and Denver, Colorado and
Toronto, Ontario and New York, New York.
Whatever you do, do NOT let your decision about moving to Canada be based
upon the "maybe" taxes on a "maybe" oil and gas play ten years from now.
Look at the good stuff in Canada and the experience and the opportunities
you will have to explore.  Of course, Denver is a pretty nice place as well
but if I had a choice between Denver and Vancouver, I take Vancouver (had
offices in Denver in the early seventies so I did have a choice).
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