Potential US Tax Changes Canadians Should Keep Their Eye On Bradley Richard Thompson June 10, 2021 Potential US Tax Changes Canadians Should Keep Their Eye On Bradley Richard Thompson June 10, 2021 Potential US tax changes Canadians should keep their eye on We are now six months [...]
Globe & Mail - Snowbirds, COVID-19 and what to do with your sunbelt property October 5, 2020 We are very pleased to share that partners David A. Altro and Bradley Richard Thompson were asked to prepare a special for The Globe and Mail, which was published on October 20, 2020. Their [...]
We are very pleased to share that partners David A. Altro and Bradley Richard Thompson were asked to prepare a special for The Globe and Mail, which was published on May 20, 2020. Their article titled “Why an estate freeze makes sense now” provides insight into a tax planning opportunity for Canadians which has come to light following the economic impact of COVID19. The article reviews the various factors such as the stock market, Canadian dollar, estate valuations, fair market value and more, which point towards an estate freeze as a tax planning opportunity.
When a Canadian resident (non-citizen of the US) sells their vacation property in Florida, any capital gain realized is subject to US tax (and withholding) but is also subject to Canadian tax. The US tax rates applicable to “long term capital gain” (gain on capital property owned for more than 12 months) are generally 15% or 20% (there are technically 3 tax brackets on capital gains for this purpose: 0% on capital gains for single taxpayers with taxable income less than $39,376; 15% for single filers with taxable income less than $434,551 and 20% for single filers with taxable income of $434,551 or more). There is no Florida income tax on individuals.
The OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the multilateral instrument or “MLI”) is now law in Canada. The MLI was Action 15 of the Base Erosion and Profits Shifting (BEPS) Project. With respect to taxpayers claiming benefits under Canadian bilateral treaties the MLI is effective January 1, 2020 with respect to withholding under 28 bilateral treaties and effective for tax years beginning June 1, 2020 with respect to all other taxes levied by Canada or one of these bilateral treaty countries. The MLI uses a “reservation” process whereby either Canada and the bilateral treaty partner can reserve with respect to certain provisions in the MLI, in either case the particular MLI provision may not apply or may apply in modified form with respect to that particular bilateral treaty.
In a recent CJAD 800AM Dollars & Sense radio show which aired on November 27, 2019, our Managing Partner David A. Altro and our Partner Bradley R. Thompson had the opportunity to sit down with Kelly Alexander. Together they examined several estate & tax planning issues for Canadians leaving their estate to their U.S. resident children.
