Buying Real Estate in the US: The Concise Guide for Canadians Book

Acknowledgments xi

Introduction xiii

1 A Rare Opportunity 1

1 How the Opportunity Was Created 3

2 The Three Types of Real Estate Transactions 6

2.1 Traditional sale 7

2.2 Short sale 7

2.3 Foreclosure or bank owned property 10

3 The Window of Opportunity 10

2 Ways of Owning Real Estate 13

1 Direct Ownership through an Individual or Individuals 16

2 Types of Ownership 17

2.1 Community property 17

2.2 Community Property with rights of survivorship 17

2.3 Ways to purchase an asset in common-law property states 18

3 Indirect Ownership Using Canadian Entities 20

3.1 Canadian corporation 20

3.2 Canadian limited partnership 21

3.3 Canadian inter vivos trusts 22

4 Indirect Ownership Using US Entities 22

4.1 Limited Liability Company(LLC) 23

4.2 US corporation 23

4.3 Revocable living trust 24

4.4 Limited Liability Partnership (LLP) and Limited Liability Limited Partnership(LLLP) 25

3 Income Taxes 29

1 The Basics 32

2 Rental Income 35

2.1 Direction ownership 35

2.2 Indirect ownership 43

3 Selling the Property 55

3.1 Foreign tax credits 56

4 State Income Taxes 60

5 Sales Taxes 62

4 Nonresident US Estate Tax and Probate 63

1 Green Card Holders 66

2 As a Nonresident, When Are you Subject to US Estate Tax? 67

2.1 The US-Canada Tax Convention (Treaty) Article XXIX B (Taxes Imposed by Reason of Death) 69

2.2 How the US nonresident estate tax works 76

3 A Dollar Is Not Always a Dollar 80

4 Probate 83

4.1 State-Specific rules of probate 85

5 Other Information You Should Know 87

1 Department of Commerce Filing Requirements 89

2.1 Title Insurance 96

2.2 Finding a real estate agent 96

2.3 US mortgages 97

2.4 Foreign currency 98

3 Hiring a Property manager 100

Conclusion 103

Appendix I: Checklist for Buying Real Estate in the US 105

Appendix II: Resources 107

About the Author 111