Cross Border Inheritance?
May 19, 2015 10:13 AM Subscribe
I'm supposed to inherit some Berkshire Hathaway shares currently in a US Fidelity fund. Catch: I'm a Canadian resident US citizen. Fidelity wants to transfer the shares to a Fidelity account, but won't let me establish an account because I'm Canadian resident. Will another US brokerage allow me to establish a US account, or do I need a Canadian brokerage? And if so, are there any ramifications I should be aware of?
Did you have a Fidelity account when you last lived in the US, for example, a 401(k)? If so, then they should be able to access that account via your Social Security Number.
The person in question is granting you these shares by his/her will. That means they have to give them to you, Fidelity account or not. Contact the executor of the person's will/estate; this should be (and probably is) an attorney who can further advise you on what to do (and has already been paid to do so).
posted by tckma at 10:43 AM on May 19, 2015 [1 favorite]
The person in question is granting you these shares by his/her will. That means they have to give them to you, Fidelity account or not. Contact the executor of the person's will/estate; this should be (and probably is) an attorney who can further advise you on what to do (and has already been paid to do so).
posted by tckma at 10:43 AM on May 19, 2015 [1 favorite]
Oh, and you probably know this, but as a US citizen, you will likely have to pay US taxes on the inheritance, if and when you choose to sell it.
posted by tckma at 10:45 AM on May 19, 2015
posted by tckma at 10:45 AM on May 19, 2015
Oh, and you probably know this, but as a US citizen, you will likely have to pay US taxes on the inheritance, if and when you choose to sell it.
I think the cost basis resets to the time at which you inherited them though.
posted by Blue Jello Elf at 10:57 AM on May 19, 2015 [2 favorites]
I think the cost basis resets to the time at which you inherited them though.
posted by Blue Jello Elf at 10:57 AM on May 19, 2015 [2 favorites]
Does Fidelity REQUIRE you to put the shares in a Fidelity account or do they just want you to? Do you have another brokerage account (US or Canadian) already? If so, ask your current broker what you need to do. People do move shares from one broker to another. Fidelity has no motivation to help you get your shares into a non-Fidelity account, but the brokerage you're going to have hold the shares would be motivated.
posted by mskyle at 11:19 AM on May 19, 2015
posted by mskyle at 11:19 AM on May 19, 2015
Oh, and you probably know this, but as a US citizen, you will likely have to pay US taxes on the inheritance, if and when you choose to sell it.
The tax would be due upon receipt, not sale, but the individual threshold for US federal inheritance tax is $5.43 million. So you'd need at least 25 shares to get into taxable territory. State tax treatment, or Canadian tax, might be different.
If the shares are in a Fidelity account now, you are under no obligation to keep them with Fidelity. If they can't work with you to open an appropriate account, go to another broker.
posted by beagle at 12:03 PM on May 19, 2015 [1 favorite]
The tax would be due upon receipt, not sale, but the individual threshold for US federal inheritance tax is $5.43 million. So you'd need at least 25 shares to get into taxable territory. State tax treatment, or Canadian tax, might be different.
If the shares are in a Fidelity account now, you are under no obligation to keep them with Fidelity. If they can't work with you to open an appropriate account, go to another broker.
posted by beagle at 12:03 PM on May 19, 2015 [1 favorite]
It really just sounds like you need to clear up your citizenship situation with Fidelity. It will be much much much much easier for you hold these shares in a US account as a US citizen. In fact I'm confused why Fidelity can't deal with this. Find a different US based broker.
posted by JPD at 12:32 PM on May 19, 2015
posted by JPD at 12:32 PM on May 19, 2015
When I notified Vanguard of my new Canadian address they suddenly wanted nothing to do with me. (Strangely enough, Fidelity seems OK with it but I opened the account before moving.)
If you have a U.S. address you can use, you might save some difficulties by opening the account under that address.
posted by grouse at 1:23 PM on May 19, 2015
If you have a U.S. address you can use, you might save some difficulties by opening the account under that address.
posted by grouse at 1:23 PM on May 19, 2015
Oh, and you probably know this, but as a US citizen, you will likely have to pay US taxes on the inheritance, if and when you choose to sell it.
You say these shares are in a "fund". Did you mean Brokerage account? If it is a fund, and if it is an IRA you have options. Cash it in now and pay taxes like it is regular income, or amortize withdrawals over the expected normal lifespan of the funds original owner, and pay taxes as you go. The IRS has info on line for "Inherited IRAs"
posted by Gungho at 1:26 PM on May 19, 2015
You say these shares are in a "fund". Did you mean Brokerage account? If it is a fund, and if it is an IRA you have options. Cash it in now and pay taxes like it is regular income, or amortize withdrawals over the expected normal lifespan of the funds original owner, and pay taxes as you go. The IRS has info on line for "Inherited IRAs"
posted by Gungho at 1:26 PM on May 19, 2015
Correction:
> amortize withdrawals over your expected lifespan
posted by yclipse at 3:01 PM on May 19, 2015
> amortize withdrawals over your expected lifespan
posted by yclipse at 3:01 PM on May 19, 2015
It really just sounds like you need to clear up your citizenship situation with Fidelity.
The brokers are starting to close accounts for people abroad, citizen or not. It has to do with soliciting for mutual funds in other countries.
OP: easiest thing is to have the asset sold and funds wired to your bank account. Talk to the decedent's lawyer to confirm there won't be tax consequences. (There shouldn't be if the stock was in their gross estate)
posted by jpe at 3:06 PM on May 19, 2015 [1 favorite]
The brokers are starting to close accounts for people abroad, citizen or not. It has to do with soliciting for mutual funds in other countries.
OP: easiest thing is to have the asset sold and funds wired to your bank account. Talk to the decedent's lawyer to confirm there won't be tax consequences. (There shouldn't be if the stock was in their gross estate)
posted by jpe at 3:06 PM on May 19, 2015 [1 favorite]
I had to do this. It took a bit of back and forth, because the fund companies didn't want to give me the money (I am also Canadian resident, US citizen) and I knew by law they had to. So just know that they have to give you the money (if you are the rightful heir of course), but they may keep telling you that they have specific rules about it, which just are not true.
posted by miles1972 at 6:11 AM on May 20, 2015
posted by miles1972 at 6:11 AM on May 20, 2015
« Older Help me make an awesome playlist for an elementary... | The night never questions the stars when they... Newer »
This thread is closed to new comments.
posted by Zedcaster at 10:21 AM on May 19, 2015