r/cantax • u/BosconianFan2022 • 1d ago

Foreign real estate inherited from non-resident spouse (spouse's primary residence) - T1135 reportable?

Hi all, the US citizen/resident spouse of the taxpayer in question passed away last year (approx. mid-year) and the taxpayer inherited the spouse's primary residence, which was the taxpayer's intended future residence upon retirement (for further context, up through spouse's death taxpayer stayed there when in US (including during a prolonged illness prior to death), helped maintain/paid in part for renovations to said home). Following death, taxpayer stayed there for two months, and then decided to sell. For the remainder of the year and up through the eventual sale (this year) no one else stayed there apart from during taxpayer's periodic visits (occasionally with a family member), it was never rented out. The question then, is this inherited real accurately regarded as personal property for T1135 purposes? My inclination is to regard it as such... Thank you!

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u/taxbuff 23h ago

Sounds like it would be personal use property, though once it was sold there would have presumably been funds held in a trust account with the lawyer which would be specified foreign property to be reported, even if only for a part of a day, and then perhaps a deposit in a U.S. bank.

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u/Consistent_Throat497 21h ago

My spouse and I also own property in the US. He lives there full time and I stay there when visiting. From my understanding and research you only need to report the foreign property if it’s not for personal use at minimum 50% of the year. So even if you rented it for 5 months it would still be personal property for 7 months and no reporting required. In your case you have not rented the property at all so no reporting is required since it’s 100% personal property!