Episode 60: U.S. Beneficiaries Inheriting Canadian Assets: What You Need to Know

Ever wondered what really happens when a U.S. citizen inherits assets from their Canadian parents?

Spoiler: it's not as simple as you’d think.

In today’s episode, host Gerry Scott sits down with Aaron Dawes, cross-border tax expert from Smythe LLP, to unpack the increasingly common—but often misunderstood—scenario of U.S. individuals inheriting Canadian assets. With more families living cross-border lifestyles and adult children relocating south, questions around tax, compliance, and estate planning have taken on a whole new level of complexity.

Aaron breaks down what Americans need to know when it comes to Canadian inheritances—covering everything from brokerage accounts and real estate to RRSPs and even mutual funds (hello, PFIC reporting!). He also shares important guidance for Canadian parents who want to ensure their U.S.-based children don’t end up tangled in unnecessary tax trouble.

Plus, they touch on the rise of dual-country living, why California residents often get the short end of the treaty stick, and what both sides of the border can do to minimize the risk of double taxation.

Whether you're the beneficiary, the planner, or somewhere in between, this episode will give you a better understanding of the tax landscape and how to protect your assets—and your sanity.

Key Takeaways:

• What U.S. beneficiaries need to report when inheriting Canadian assets

• Why Canadian mutual funds can trigger complicated (and costly) U.S. tax filings

• How the Canada–U.S. tax treaty works—and when it doesn’t

• The role of executors and why residency matters

• Steps Canadian parents can take now to ease the future burden on their U.S. children

About the Guest:

Aaron Dawes, CPA, is a partner at Smythe LLP, a British Columbia-based accounting firm with offices in Vancouver, Langley, and Nanaimo. Specializing in U.S.-Canada cross-border taxation, Aaron works closely with families and business owners navigating complex estate, income, and compliance matters across borders.

Next Episode Teaser:

Stay tuned for part two, where we flip the script: What Canadian beneficiaries need to know when inheriting from U.S. parents—especially when irrevocable trusts come into play.🔗 

Helpful Links:

• Smythe LLP: https://www.smythecpa.com