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New Member
posted Oct 30, 2019 5:49:19 PM

What form do I need to file for foreign inheritance?

In 2017 I inherited 1/3 of a property in EU after my parents passed away. This house was then sold by my two brothers and 1/3 of the funds were transferred to me.

No income from the foreign property was otherwise received. There was no trust established.

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1 Best answer
Level 15
Oct 30, 2019 5:49:20 PM

From the information you have provided, you should only need to complete the Schedule 3 - Capital Gains or Losses, when you file your tax return. You will need to determine the value of the property on the day you inherited it, then the proceeds upon sale. Any income earned on this sale will result in the Capital Gain.

I have attached information to support why the other forms associated with a Foreign Property Inheritance should not apply in your situation. If you feel your situation does apply and you need to complete either form, be advised that Form T1142 is not available in TurboTax and must be downloaded from the CRA site.

  • If you were still holding that property and your "total specified foreign property" exceeded $100,000, you would be required to complete and file Form T1135. 
  • As a "Trust" was not established, Form T1142 Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust should not apply.

https://turbotax.intuit.ca/tips/rules-for-inheriting-foreign-property-476

https://turbotax.intuit.ca/tips/declaring-inherited-overseas-property-6225

3 Replies
Level 15
Oct 30, 2019 5:49:20 PM

From the information you have provided, you should only need to complete the Schedule 3 - Capital Gains or Losses, when you file your tax return. You will need to determine the value of the property on the day you inherited it, then the proceeds upon sale. Any income earned on this sale will result in the Capital Gain.

I have attached information to support why the other forms associated with a Foreign Property Inheritance should not apply in your situation. If you feel your situation does apply and you need to complete either form, be advised that Form T1142 is not available in TurboTax and must be downloaded from the CRA site.

  • If you were still holding that property and your "total specified foreign property" exceeded $100,000, you would be required to complete and file Form T1135. 
  • As a "Trust" was not established, Form T1142 Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust should not apply.

https://turbotax.intuit.ca/tips/rules-for-inheriting-foreign-property-476

https://turbotax.intuit.ca/tips/declaring-inherited-overseas-property-6225

Returning Member
Feb 21, 2020 1:26:58 PM

Hi,

I've been in a similar situation, inherited some cash and a house together with my brother overseas in 2016. cash was split in 2016, my portion in joined bank account with my husband, overseas. Paying bills for the house from that money since. Finally the house was sold in 2019, proceeds again into the joined bank account with my husband. There wasn't a trust nor income or capital gains from the sale of the house. Now it is my understanding that the money and property belongs to my husband and me together, even though I inherited it. Therefore, it would be under the $100000 mark for him and me, am I right? 

Level 13
Feb 25, 2020 4:32:11 PM

Inheritance in Canada is tax-free, but when you are dealing with Foreign Inheritance it can get a little tricky.

 

Please review the links provided below for further information: