Joint Home ownership Canadian parent with US child -

Good Morning,
My father recently passed away and left everything to my Mother.  She now wants to put me as a joint (co-owner) of the house.  I have lived in the US since 1983 and have US citizenship but was born in Ontario.  What benefits/disasters will this bring me upon the death of my mother where I will inherit 50% of the remaining Canadian estate?
david ingram replies

This question was originally rejected but it is a problem that comes up more and more and i wanted to answer it.

I don't have time to start anew but this older question should / will apply.

I am a Canadian citizen and US resident for 15yrs with a green card. My mom is 77yrs old and owns a house in Ontario.  Should my mom pass her home to me and my brother (who lives in Ontario) as part of her will upon which my brother and I would pay tax and sell the home, or should my brother and I purchase the home from her now while she's alive and have her live in it rent free?

What's the best approach from a US/Canada  estate tax, and other tax perspective for me as a US resident?
david ingram replies:

Mom should live in the house in her ownership to save capital gains tax as her principal residence.  This assumes the prices stay even or rise.  If the house values were to fall from now to when mom dies, it would be better to put it in your names now to save on probate fees.

Tell me what the house value will be when mom passes and I can tell you what to do today. If mom is in good health and her mother lived to 93, leave it in mom's name.  If mom has been given six months to live, transfer it now.

This is a tough decision for everyone.  You might want to do this. 

Transfer the house into all three names in joint tenancy with right of survivorship.  Have a separate codicil that you and your brother AND  YOUR WIVES all sign agreeing that none of you own the house.  That you will not pledge your share as security.  That you will not attempt to partition the house. that,if a divorce occurs, your wives will not try and get 'their' share.  Make sure that the codicil or agreement states unequivocally that you and your  brother are only holding your shares in trust for your mother.  This only avoids probate fees- MAYBE!!

A month ago, I would have said there is no problem with this.  However, although I have no details, I was told that the BC government has challenged this in the last while and wants probate fees anyway. 

Hope this helps.



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This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
$1,200 would be the same with one rental
$1,300 would be the same with one business no rental
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
A Business for $400 - Rental and business likely $550 to $700
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.


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