Snowbirds, US homes and US shares
US Estate Tax for Canadians Who Own US Property
A Florida condo, an Arizona home or a portfolio of US stocks can create a US estate tax filing when a Canadian dies, on top of Canada's tax on gains deemed realized at death. Gurleen Kaur, CPA licensed in British Columbia and Washington State, helps Canadian families see the exposure early and coordinate it with their estate lawyer.
Quick answer
Do Canadians pay US estate tax on US property?
They can. Under the Form 706-NA instructions, the estate of a person who was neither a US citizen nor domiciled in the US must file a US estate tax return when US-situated assets, with certain adjustments, exceed US$60,000. US real estate and shares of US corporations count, wherever the share certificates are held, while ordinary US bank deposits generally do not. Article XXIX B of the Canada-US treaty gives Canadian residents a prorated share of the US unified credit and small-estate relief on US securities and certain other property when the worldwide estate is US$1.2 million or less. Canada separately taxes capital gains deemed realized at death.
What counts as US property
The location rules below come from the Form 706-NA instructions. Assets held through a corporation, trust or joint title need individual review.
| Asset | US-situated for estate tax? | Source |
|---|---|---|
| US real estate (a condo, house or land) | Yes, if physically located in the US | 706-NA |
| Furniture, cars and other belongings kept in the US | Yes, tangible personal property physically located in the US | 706-NA |
| Shares of US corporations, including those held in a Canadian brokerage account | Yes, wherever the certificates are held | 706-NA |
| Shares of Canadian corporations | Generally no | 706-NA |
| Deposits with a US bank, not connected with a US business | Generally treated as outside the US | 706-NA |
How the Canada-US treaty helps
- Prorated unified credit. A Canadian resident's estate can claim a share of the US unified credit based on the ratio of US assets to the worldwide estate (section 2102(b)(3)(A) and Article XXIX B, cited in the Form 706-NA instructions). The US basic exclusion amount that drives this credit is US$15,000,000 for 2026 (IRS).
- Small estate relief. When a Canadian resident's worldwide estate is not more than US$1.2 million, the treaty can exempt US securities and certain other US property. It does not cover every asset, and the exempt assets must still be listed in a statement with the return.
- Worldwide disclosure. Claiming treaty benefits means reporting the value of the entire worldwide estate on Form 706-NA.
- Deadline. Tax shown on Form 706-NA is due within 9 months after the date of death unless an extension of time to pay was granted.
Canada's side at death
Canada treats a person who dies as having disposed of everything they owned just before death, and the resulting capital gains or losses are reported on the final return. Property passing to a surviving spouse or common-law partner can sometimes roll over at no gain if conditions are met (CRA).
Article XXIX B of the treaty also contains rules for crediting US estate tax and Canadian tax on the same US property against each other in certain cases. The order and limits matter, so both sides should be calculated together.
Planning conversations to have early
- List every US asset, its cost and current value, in US dollars and Canadian dollars
- Estimate the worldwide estate and the prorated US credit
- Check how title is held: alone, jointly, or through a corporation or trust, with your estate lawyer
- Make sure your executor knows Form 706-NA may be needed and when tax is due
- Plan liquidity for any US tax due within 9 months
- Review whether selling, gifting or restructuring makes sense before any change
How we help
Exposure estimate
US-situated assets, worldwide estate, prorated credit and small-estate relief, modelled for your family.
Coordination with your lawyer
Tax numbers for the estate planning your lawyer drafts, in both countries.
After a death
Final Canadian return, US estate return and any US income tax filings for US property, prepared or coordinated.
Common questions
Is a US estate tax return required if my US condo is worth only a few hundred thousand dollars?
Often, yes. The Form 706-NA filing threshold is US$60,000 of US-situated assets, with certain adjustments. Whether tax is actually owed after the treaty's prorated credit depends on the size of the worldwide estate.
Are US stocks in my Canadian brokerage account US property?
Yes. The Form 706-NA instructions say stock of corporations organized in the US is property located in the US no matter where the certificates are physically located.
Do US bank accounts count?
Deposits with a US bank are generally treated as located outside the US for estate tax if they are not effectively connected with a US trade or business.
What is the Canadian small estate exemption?
Under the 1995 Protocol to the Canada-US treaty, if a Canadian resident's worldwide estate is not more than US$1.2 million, US securities and certain other US property can be exempt. The exempt assets are listed in a statement attached to Form 706-NA rather than on the main schedule.
When is US estate tax due?
The tax shown on Form 706-NA is due within 9 months after the date of death unless an extension of time to pay was granted.
Does Canada also tax my US property when I die?
Canada treats you as having disposed of your capital property just before death and taxes the resulting gains on your final return, subject to rules such as the spousal rollover. The treaty contains rules to coordinate the two countries' taxes in certain cases.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
- IRS: Instructions for Form 706-NA (estate of a nonresident not a citizen)
- IRS: What's new, estate and gift tax (basic exclusion amounts)
- IRS: United States income tax treaties A to Z
- CRA: Taxable capital gains on property at death (deemed disposition)
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated October 21, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: Snowbird tax and Form 8840, Foreign property and rentals, FIRPTA withholding, US tax accountant in Surrey.
Check your US estate tax exposure
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