Due to the “financial crisis” in U. S. real estate and the relative strength of the Canadian dollar in the past couple of years, an increasing number of Canadians are purchasing a second home or vacation property in the U.S. However, unless properly structured, the ownership and disposition of a U.S. property can be fraught with complications for the misinformed and ill prepared.
Joint Tenancy and your U.S. vacation home
Joint ownership, as a general rule, is not a recommended form of ownership for Canadian residents who have decided to purchase real property in the U.S. as this form of ownership can create U.S. gift and estate tax problems. For example, U.S. gift tax may be imposed on the creation or termination of the joint tenancy. In addition, 100% of the value of the property is included in the estate of a deceased joint tenant if the surviving joint tenant is not a U.S. citizen; unless the executor of the estate can prove that the surviving joint tenant contributed funds towards the purchase of the property.
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