D'Costa Financial Group
The news has been full of stories lately of plunging real estate prices in the United States. Many Canadian visitors to such places as Florida, Arizona and Hawaii have seen the small forests of For Sale signs lining the streets. Real estate promoters from these and other states are running seminars and renting booths in trade fairs to peddle their wares.
Many Canadians are viewing this as an opportunity to buy a bargain. But what are the consequences of owning U.S. property?
Estate Taxes - When someone dies and they own property in the United States, the Internal Revenue Service (IRS) will look to collect an estate tax. This tax is based on the value of the property. The IRS will determine the total estate tax owing based on the deceased's world wide assets. They view the entire gross estate value of the deceased to figure out how big an estate tax cheque needs to be written to pay the bill.
Remember, the deceased doesn't have to be a U.S. resident to have their estate subject to these taxes. All they have to be is a property owner there.
Rental Income - Many property owners will look to renting their property to offset some of the costs of ownership. This rental income will then be subject to taxes at several levels. Depending on where the property is located, the rental income could be subject to state taxes, municipal taxes, a form of innkeeper taxes, and, of course, federal income taxes.
Copyright © 2008 Life Letter. All rights reserved. For information purposes only and not intended to provide specific advice. Readers are advised to seek professional advice before making any financial decision based on any of the ideas presented in this article. This copyright information presented online is not to be copied, or clipped or republished for any reason. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision
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- It's up to you to know the consequences
