How to invest in US real estate is a question many Canadians would love to know and learn about. The decline of US currency, the appreciation of the Canadian dollar, and the hundreds of thousands of properties that have been seized by the banks and are now for sale has sparked a buying frenzy for many Canadians and other nationalities to pick up luxury properties at bargain basement prices.

1. Helpful Tax Advice for Canadians
Buying US Real Estate
For Canadians buying US real estate, the US estate tax is something that many fear
and most do not understand. Before 2005, the idea that worked best for many
Canadians was to simply establish a Canadian corporation. The fact is that the
corporation does not cease to exist with the demise of its shareholder making it so there
is no requirement that will enforce the US to collect on estate tax.
However, that law has changed because even if you put the property in a corporation,
you would still be liable to pay what is called a taxable benefit because you used a
property that is wholly owned by your Canadian corporation. Here are a few tips to
hurdle this issue.
Create a Partnership
A good strategy of beating the estate tax is to set up a partnership for your US real
estate holdings. This will effectively allow you not to pay an estate tax and when your
US property starts earning an income, there are some benefits as well. To explain it
clearly, the combination of United States and Canadian levies on the income from
investment as well as rental money and capital gains is much greater in a corporation
setup as opposed to a partnership agreement.
Employ a Family Trust
One effective means by which you can hurdle the dreaded estate tax is through
ownership of United States property using a family trust scheme. In order for this to
work, you have to buy the property in the trust as a personal purchase and then
conveniently transfer it. This is because you could be liable also for what is called the
US gift tax. The conditions of the trust would be in such a fashion where you have no
power to remove the property from the trust but be able to enjoy its usage and benefits.

2. Consider Putting up a Hybrid Entity
I consider this strategy to be my personal favorite. The theory here is to establish a
Canadian partnership that will be considered a partnership in Canada but a corporation
in the United States. You can do this by choosing to be considered as a corporation
when you decide to file in the United States.
The hybrid entity will be able to skirt the so called taxable benefit that is imposed on
Canadian corporations while in the United States the entity would be able to avoid
paying estate tax because the US Internal Revenue Service would have no recourse
but to consider it as Canadian corporate shares and not simply real estate.
To get more information about Canadians buying US real estate visit:
http://www.stevemartel.com