
The Cross-Border Tax Implications of Canadians Holding U.S. Real Property
By Anthony Diosdi Canadians actively invest in U.S. real estate by speculating on land and developing homes, condominiums, shopping centers, and commercial buildings. The article attempts to summarize the Canadian and U.S. tax consequences surrounding a Canadian’s acquisition of different U.S. real property interests. The most common way Candians hold U.S. real property is by direct ownership. Direct ownership by an individual Canadian resident of U.S. real estate is generally not recommended because the individual will be exposed to the commercial risks associated with the property. Personal ownership may also give rise to the U.S. estate tax and gift tax. Personal ownership of U.S. real property may also trigger cross-border tax filing requirements. If a Canadian owns real property that is income producing, he or she will likely be required…