U.S. gift tax
Posted date : May 30, 2019.
I own several quarters of farmland in Saskatchewan and plan to will three to four quarters to each of four non-farming children, including a son who is a dual citizen and resides and works in Arizona. All of their farmland will incur some capital gains tax in Canada, as it has been cash rented since I purchased it. Will my U.S. son have to pay gift tax in the U.S., and will my estate have to pay capital gains tax in Canada?
Is there a way to will/gift Saskatchewan farmland to a U.S. dual citizen without incurring U.S. gift tax on the market value?
Ed.: Your U.S. son will not have to pay tax upon inheriting the property. There will be capital gains tax payable by your estate in Canada, of course. There is a gift tax in the U.S. which would apply if the property were gifted prior to your death, whereas in Canada, there is no gift tax. With some astute planning, you could probably avoid any taxes.