inheritance or gift from Canada

Hi David,

About 18 months ago I asked you a tax question and told you I was leaving Canada to go back to the U.S.A. and you told me if I had been in Canada for 4 1/2 years why not wait to get my citizenship. Well,  if you hadn't said that I certainly would not have and I did.  So now I am a citizen and just bought a home here and am very happy to be a Canadian living in Canada so thank you for walking me through a moment of homesickness.

I do have a question.  My mother just died here in Canada and told my father to give me $25,000.00.  He gave me a check for $20,000 and one for 5,000 it wasn't in a will or in life insurance.  Do I need to report this as income to the the IRS.

Thank you very much for your time you continue to me an amazement to me.  And thanks for keeping me sane because I really love it here now.

david ingram replies:

Congratulations on your dual citizenship.Sorry about your mother.

If your mother and father are American which I presume they are, there is a possibility that there is gift tax involved.  If an American gives anyone (other than their spouse) more than $12,000 the giver, not the recipient is liable for gift tax. You and he have to decide how and when it was paid and WHO GAVE IT TO YOU.  Maybe your mother gave $12,000 and your father gave $12,000 and if it was Canadian $$, $25,000 Candian is less than two x's $12,000 American.

in any case it is NOT taxable to you and is NOT deductible to them as far as income tax goes.

If mother is/was a Canadian and not American, there is no problem, because Canda does not have a gift tax. �