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• Canadian Non-Residents with US based assets are exempt from US estate tax if the value of the assets is $60,000 USD or less. And in this case, no US Estate Tax Form 706-NA would be required. If the Canadian Non-Resident owned U.S. Real Estate it is recommended a Transfer Certificate be obtained from the IRS before any transfer from the decedent’s estate/ Above $60,000 USD a US estate tax return 706-NA is required to be filed within nine (9) months after the date of death. In order to determine if there would be any US estate tax due, a formula under the US-Canada Tax Treaty kicks in. See US- Canada Tax Treaty link below. Normally, there is no US estate tax if the value of your worldwide assets does not exceed the maximum amount, which is adjusted annually. In 2017, it is about $5.4 Million USD. But if your worldwide assets exceed the formula or the $5.4 Million USD (as adjusted annually) there may be US Estate Tax due (which can be around 40%). And the decedent’s estate should request a transfer certificate from the IRS before the estate transfers any property.
• Link: U.S.-Canada Tax Treaty
• Article XXIX B (Taxes Imposed by Reason of Death) of the U.S.-Canada Income Tax Treaty (“Treaty” ) provides special rules that may reduce taxes for U.S. citizen or resident decedents with Canadian property and Canadian residents with U.S. property. These rules were first incorporated into the Treaty under the 1995 Protocol to the Treaty.
• If the decedent was a Canadian resident but not a U.S. citizen at the time of death, the estate can take a “pro rata” unified credit to compute U.S. estate tax. The pro rata credit under the Canadian treaty is determined by multiplying the exclusion amount available to a U.S. citizen decedent by a fraction of the value of the decedent’s U.S. assets over the value of the decedent’s world-wide assets. A statement invoking the right under the Treaty described above and showing the tax calculation must be attached to Form 706-NA. See paragraph 2 of Article XXIX B of the Treaty.

• Watch abandoning your Green Card, including by failing to change your address and extended visits abroad for more than 180 days.
• Watch the Expatriation Tax if you abandon your Green Card after satisfying the 8 of 15 year test.
• Watch U.S. Estate Tax liability if you remain a Green Card holder indefinitely, and do not naturalize and become a U.S. Citizen. In 2017, a U.S. Citizen is entitled to a unified credit of $5,400,000 USD against U.S. Estate Tax.

Canadian Non-Residents Have Preferred Non-Probate Alternatives
to Transfer Real Estate in Washington State

• Washington State has innovative non-probate alternatives to transfer real estate upon death in comparison to B.C.
• Options include Community Property Agreements between spouses, and Transfer on Death Deeds (“TODD”), which can be used between spouses, children, relatives, or other beneficiaries.
• Another option includes an Affidavit of No (or Lack of) Probate in Washington, and in effect, transfer ownership to the surviving heirs.
• And even if a Probate is necessary it is often not as burdensome and expensive as in B.C. While there is a court filing fee in Washington, there are no “probate fees” as in B.C.

Canadian Non-Residents Selling or Gifting Real Estate
in Washington State

• A sale of property may trigger U.S. tax liability but the tax rate may be reduced by capital gains treatment. There is often a withholding on most transactions.
• Gifting U.S. real estate is generally not favorable and may result in U.S. tax liability.

The articles and information contained on in this website were prepared by Stowe Law PLLC. They are a general statement of the law of the State of Washington. The laws of other states differ from Washington law, and these articles are not intended to describe the law of any state except Washington. The articles and information found on this web site are intended for general informational purposes. They are not legal advice for a reader in any particular legal situation. The only way to obtain legal advice on a particular situation is to consult a licensed attorney. The reader’s use of this website and the information contained herein does not create an attorney-client relationship of any kind with Stowe Law PLLC.

The information contained in this website, its design, and its functionality are all subject to copyright by Stowe Law PLLC to the extent allowed by United States law. All rights reserved. No portion of the information contained in this web site may be reproduced in any fashion without the prior written consent of Stowe Law PLLC.

The BC & Whatcom County Connection

• Mark understands B.C. and Canadian Culture.
• Mark, a resident of Point Roberts, WA, has been surrounded by Canadians visiting
  their cottages for many years.
• Mark’s daughter, born in B.C., plays sports in B.C.
• Mark enjoys hiking on the Northshore.
• Mark relishes the views of Mount Baker and the Salish Sea.
• Mark enjoys walking the family dog, Enzo, in the woods at Point Roberts.
• Mark is still trying to “successfully” ride his mountain bike down Galbraith Mountain.

• EDUCATION
• University of Washington, Seattle, WA                                          1983
• Bachelor of Arts in Philosophy–Cum Laude, Honorary Distinction, Phi Beta Kappa
• Phi Delta Theta Fraternity
• Gonzaga University, Spokane, WA 1986
• Juris Doctorate
• AFFILIATIONS
• Washington State Bar Association, Member.                    1987-present.
• US District Court, Western District of Washington, Seattle, WA. 1987-present.
• Certified Player Agent by the National Hockey League Players Association (“NHLPA”). 1996-present.
• US Tax Court, Washington D.C. 2009-present.
• Practitioner of Foreign Law, The Law Society of British Columbia 2017-present.
• INTERESTS  
• Enjoys Family, Hockey, Baseball, Mountain Biking, Hiking, and Travel.