Canadian Property Willed to US

Dear David,
I follow your responses almost daily with admiration and
appreciation. Thank you for this incredible service!
My Canadian parents, living in BC, own a chalet in Whistler built
in 1984 for approx $200,000 and now worth approx. $1.5 M. My
father passed away 2 years ago and my 85 year-old mother wanted
to place me, as the eldest of three siblings, on the title
jointly, in place of my father. I am now a US citizen living in
the US. In reading some of your responses, I now realize I would
have to pay capital gains taxes somewhere along the line so we
quickly gave up on that idea.
My mother has been advised to make a Will instead, as I have 2
siblings with 6 children between them. My father’s dying wish was
that I manage the chalet (need to pay all bills and maintain
upkeep, but I can rent it, live in it, allow extended family to
use it, or a little of all. The rental suite usually covers
expenses). When I die, these 6 grandchildren inherit the chalet
(my 2 children have been cut out of the inheritance – can I pass
my part through to them anyways?). If I inherit the chalet, are
similar penalties imposed due to my US citizenship status? If I
move to Canada for 2 years, are taxes waived? Does it make a
difference if I claim dual citizenship?  We are generally fairly
articulate but are getting confused in the complexity of it all.
Please advise.
Most appreciatively,
david ingram replies:
Because it is a second home for all of you, anyone inheriting it
will have to pay capital gains tax on its eventual sale.
However, if your name was put on it for the time being, it is not
"yours" unless that is the intent when your name goes on.
If your name is on title holding it in trust for your mother and
the eventual beneficiaries, i is not yours, you are simply a or
the trustee.
As it is, when your mother passes, it will be subject to Canadian
capital gains tax.\r
You are already a dual citizen - you did not lose your Canadian
citizenship when you became an American.
I do not understand why your two children have been cut out when
your mother wants to put you on the title.
However, if your mother did just put you on the title without
your signing some undertaking that you were the trustee and would
further "divvy it up as follows", when she passed, it would all
be yours which might offend everyone else.
You need to sit down with your mother and all the siblings and
hammer it out and keep good notes.  I would be happy to
participate to explain the tax ramifications to everyone.
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A West Vancouver lawyer who deals in a fair number of
cross-border estates is.David Stoller at (604) 922-4702.  He
could help with the drafting of a will and any codicils necessary
to effect your mother's wishes.
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa
US / Canada Real Estate Specialists
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