US estate tax for Canadian snowbirds
If you own Florida property, Arizona real estate, or hold US-listed stocks directly, you may have US estate tax exposure at death. The Canada-US Tax Treaty provides a prorated unified credit that often eliminates the tax — but filing requirements still apply above $60,000 USD in US-situs assets. This calculator runs the math.
How this is calculated
- 1.Worldwide gross estate: $3,000,000 USD
- 2.US-situs assets: $400,000 USD
- 3.Filing required (above $60,000 USD threshold)
- 4.Tentative US estate tax on US-situs assets: $121,800
- 5.Proration ratio: $400,000 / $3,000,000 = 13.33%
- 6.Prorated unified credit exemption: $13,990,000 × 13.33% = $1,865,333
- 7.Tax-credit equivalent of prorated exemption: $121,800
- 8.Net US estate tax owing: max(0, $121,800 − $121,800) = $0
Note: Even where no US tax is owed, a US estate tax return (Form 706-NA) must still be filed if US-situs assets exceed $60,000 USD. Penalties apply for non-filing.
Note: The 2017 TCJA exemption ($13.99M in 2026, indexed) is scheduled to sunset for deaths in 2026 and later, reverting to roughly $7M USD unless extended. This calculator uses the current 2026 figure as the planning baseline.
Note: This calculator does not account for marital deduction availability (more limited for non-US-citizen spouses, requiring a Qualified Domestic Trust), gift tax interaction, or state-level estate taxes (some US states impose their own estate or inheritance taxes in addition to federal).
Figures shown are approximate, calculated from current publicly-available statutes and standard formulas. Final amounts depend on your specific circumstances — assets in your name versus jointly held, beneficiary designations, debts, province-specific exemptions, and applicable tax credits. For numbers you can act on, a Canadian accountant or licenced estate planner can verify against your actual situation.
Frequently asked questions
Do Canadians really owe US estate tax?
Yes — Canadians who die holding US-situs assets above $60,000 USD must file a US estate tax return (Form 706-NA) and may owe tax. The Canada-US Tax Treaty provides a prorated unified credit that often eliminates the tax for ordinary Canadian estates, but the filing obligation is independent of the tax obligation. Missing the filing triggers penalties even when no tax is owed.
What counts as a US-situs asset?
US real estate (Florida condo, Arizona house), US-listed stocks and bonds held directly in a US-based or Canadian brokerage account, US tangible personal property physically located in the US, and US-situs business interests. Important exception: US-listed stocks held inside an RRSP or RRIF are NOT US-situs for estate tax purposes — they're treated as Canadian-situs through the treaty's investment-vehicle rules.
How does the Canada-US Tax Treaty help?
Article XXIX-B grants Canadian decedents a prorated portion of the US unified credit, calculated as (US-situs assets / worldwide gross estate) × full US exemption. For most Canadians whose worldwide estate is below the US exemption (~$13.99M USD in 2026), the prorated credit fully offsets the US estate tax on typical US-situs holdings.
Will the US exemption decrease?
Possibly. The 2017 TCJA temporarily doubled the US unified credit exemption to its current ~$13.99M USD level for 2026, indexed annually. Without legislative extension, the exemption is scheduled to sunset for deaths in 2026 and later, reverting to roughly $7M USD. This calculator uses the 2026 figure as the planning baseline; verify against current law before relying on the result.
What about state-level estate taxes?
Some US states impose their own estate or inheritance taxes in addition to federal. Florida and Texas have no state estate tax. Some other states do — typically with much lower thresholds than the federal exemption. Canadians with property in states like Massachusetts, New York, Oregon, or Washington should check state-level exposure separately.
How can Canadians reduce US estate tax exposure?
Common strategies: hold US-listed stocks inside a Canadian-controlled holding company (the holdco's shares are Canadian-situs, even if it holds US stocks); hold US real estate through a Canadian-controlled corporation (more complex; triggers other tax issues); use a cross-border irrevocable trust; or simply stay below the $60,000 USD US-situs threshold. Each strategy has trade-offs; talk to a cross-border tax specialist for substantial exposures.