# US Estate Taxes on Canadian Mutual Funds?



## Xoron (Jun 22, 2010)

From what I understand, the IRS can go after you for Estate taxes (Upon death) if you have $60,000US taxable assets AND $2M in total worldwide assets. (doesn't apply to US Securities held in an RRSP). 

If you hold a Canadian mutual fund that holds US assets, does that count toward the $60,000 US assets? Specifically, the funds:

TD E-Series US Index Fund:
https://www.tdassetmanagement.com/fundDetails.form?fundId=3270&prodGroupId=1&lang=en&site=TDCT

Mawer US Fund:
http://mawer.com/mutual-funds/fund-profiles/mawer-u-s-equity-fund/

Steadyhand 
https://www.steadyhand.com/funds/equity/
https://www.steadyhand.com/funds/global/

Thanks


----------



## My Own Advisor (Sep 24, 2012)

http://www.steinbergwealth.com/uplo... Estate Taxes for Canadian Residents _2_.pdf

"Unless a person has assets with a fair market value exceeding $5.2 million, there shouldn’t be a need to conduct complex cross border planning when owning US assets be they real estate or financial instruments. If the value of your estate is greater than $5.2 million, and you own more than $60K in US assets, it’s a good idea to formulate a financial plan to mitigate potential estate taxes."

I believe both conditions needs to apply, re: >$60k US assets and >$5.2 M.


----------



## Xoron (Jun 22, 2010)

MOA, thanks for that. I though the total assets was $2M, which is entirely possible with today's RE values. $5.2M on the other hand would be nice, but unlikely 

That being said, I'm surprised the 60k for US assets seems like an awfully low number, designed to ensnare foreigners with US domiciled stocks / investments.


----------



## My Own Advisor (Sep 24, 2012)

I agree, $60k USD seems low. 

I suppose one way to avoid U.S. estate taxes is to hold CDN ETFs that hold U.S. securities, like VUN for VTI? Then, you're into a mess of withholding taxes on the VUN. 

U.S. estate taxes is a problem only the wealthy will have to wrestle with it seems, until the laws change of course!


----------



## Xoron (Jun 22, 2010)

My Own Advisor said:


> I agree, $60k USD seems low.


Which is why I was wonder if Canadian Based Mutual Funds would be considered US assets



My Own Advisor said:


> U.S. estate taxes is a problem only the wealthy will have to wrestle with it seems, until the laws change of course!


Until the IRS decides to lower the threshold on total assets, then ensnare a larger group of people


----------



## My Own Advisor (Sep 24, 2012)

"ensnare" indeed! Damn them!


----------



## AltaRed (Jun 8, 2009)

Xoron said:


> Which is why I was wonder if Canadian Based Mutual Funds would be considered US assets


No. Canadian domiciled mutual funds are not US assets even if all they hold are US domiciled securities.


----------



## Xoron (Jun 22, 2010)

Timely article on exactly this topic:
http://assetbuilder.com/andrew_hallam/how_us_estate_taxes_could_hammer_non_american_expats


----------

