What is a US Situs Asset?

By Matt Wolch
February 23, 2017



For most Canadian tax residents, the US estate tax regime only applies to their US situs assets. This begs the question: what is a US situs asset?

Generally, a US situs asset is property located in or having a connection to the US, including the following:

  • Real property located in the US;
  • Shares of US publicly traded companies (even if owned inside a Canadian RRSP);
  • Shares of US private companies;
  • Cash accounts with US brokerage firms;
  • Tangible personal property located in the US with some degree of permanence; and
  • Certain debts owing by a US debtor.

Other assets having a US connection do not qualify as US situs assets for US estate tax purposes, such as the below:

  • US bank deposits not effectively connected with a business in the US;
  • Canadian mutual funds holding US securities; and
  • US treasury securities.

Given that US estate tax applies at graduated rates of up to 40%, it’s important that Canadians are aware of their US situs assets and estate planning tools that can eliminate or mitigate US estate tax exposure.

Please contact us for more information.

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