Canadian Residents with US Shares or Property: The US Taxes to Watch

US dividend withholding, the US estate tax risk, and what the Canada–US tax treaty does

Scott Tang, CPAUpdated 2026-11-052026 rules5 min read

Many Canadian residents buy US shares directly, or own a home in Florida or Arizona. As a non-US person, you are still subject to several US taxes: withholding tax on US dividends, tax on rent from and sales of US property, and one many people don't expect — US estate tax. The Canada–US tax treaty can reduce most of these, but you have to use it correctly.

15%

With a W-8BEN on file, US dividends are generally subject to 15% withholding (30% without one)

US dividends held in an RRSP or RRIF are generally not subject to withholding under the treaty

US$60,000

If a non-US person's US assets exceed this amount, a US estate tax return (Form 706-NA) is required at death; whether tax is payable then depends on relief under the Canada–US treaty

15%

When a non-US person sells US real estate, the buyer generally has to withhold 15% of the sale price

Which account holds your US shares makes a big difference

Account	US withholding on dividends	Credit in Canada? foreign tax credit	Result
Regular investment account (non-registered)	◐15% (with a W-8BEN)	✓Can be claimed	—You can claim the credit, within the limit
RRSP, RRIF	✓Generally 0%	—Not applicable	—The most tax-efficient place for US shares and US-listed ETFs held directly
TFSA	✕15%	✕Can't be claimed	—That 15% is effectively lost
RESP, FHSA	✕Generally 15%	✕Can't be claimed	—Same as the TFSA

Regular investment account (non-registered)

🗽 US withholding: ◐15% (with a W-8BEN)
🍁 Credit in Canada?: ✓Can be claimed
💡 Result: —You can claim the credit, within the limit

RRSP, RRIF

🗽 US withholding: ✓Generally 0%
🍁 Credit in Canada?: —Not applicable
💡 Result: —The most tax-efficient place for US shares and US-listed ETFs held directly

TFSA

🗽 US withholding: ✕15%
🍁 Credit in Canada?: ✕Can't be claimed
💡 Result: —That 15% is effectively lost

RESP, FHSA

🗽 US withholding: ✕Generally 15%
🍁 Credit in Canada?: ✕Can't be claimed
💡 Result: —Same as the TFSA

For Canadian-listed ETFs that invest in US shares, the US withholding happens at the fund level, so the situation is different again. See "US Dividends: Which Account Should You Hold Them In?" in the Investment Tax series.

US estate tax: the risk most easily overlooked

When a non-US person dies, their US assets (US shares, US real estate and so on, whether held with a Canadian or a US broker) may be subject to US estate tax. The Canada–US tax treaty gives Canadian residents a prorated exemption (the prorated unified credit):

Modest worldwide estate

US assets over US$60,000

A US estate tax return (Form 706-NA) must be filed

Calculated under the rules for the year of death and the treaty, the tax is often small or nil

It still has to be filed, and your executor needs to know

Large worldwide estate

A large worldwide estate with a high share in US assets

The prorated exemption isn't enough

US estate tax may actually be payable

Part of it can be credited in Canada; plan ahead

Canadian-listed ETFs that invest in US shares generally don't count as US assets; US shares held directly and US-listed ETFs do.

Your US home

1
Renting it out
Rent may be subject to 30% US withholding; if you elect to file a US return on a net basis, you pay tax only on the net rent
2
Report in Canada too
Report the rent on Form T776; US tax paid can be credited
3
Selling
The buyer generally withholds 15% of the sale price; after you file a US return, you get a refund or pay the balance
4
Canadian capital gain
Half the capital gain is included in income; US tax paid can be credited
5
T1135
A US property you rent out counts as specified foreign property

Points to watch

File a W-8BEN
Your broker will ask you to complete it to show that you are a Canadian resident and can use the treaty rate; renew it when it expires.
Spending too long in the US
If you spend much of the winter in the US, first apply the US substantial presence test. Only if you meet all the conditions — fewer than 183 days in the US in the year, a tax home outside the US for the whole year, a closer connection to Canada, and so on — can you file Form 8840 on time to claim the exception; other situations depend on the treaty and the related filings.
US citizens and green card holders are different
This article doesn't apply to US citizens or green card holders, who must file US returns on their worldwide income.
See a lawyer for estate planning
If you have significant US assets, how you hold them (personally, through a corporation or through a trust) affects estate tax; have a lawyer and a tax adviser look at it together.

How Sheng Qian CPA can help

Which accounts to use
We look at which accounts hold your US shares, whether your W-8BEN is filled in correctly, and whether US shares in your TFSA make sense.
US property, reporting on both sides
Canadian reporting of rent and sales, and the foreign tax credit; US filings are handled by a qualified US tax preparer, and we work with them.
An early estate tax estimate
Based on your US and worldwide assets, we estimate your US estate tax exposure; for fees, see "What Sheng Qian CPA Can Do for Cross-Border Families: From Tax Returns to Foreign Asset Reporting" in this series.

Sources

IRS: Form W-8BEN · Some nonresidents with U.S. assets must file estate tax returns · FIRPTA withholding
IRS: Form 8840, Closer Connection Exception Statement · Closer connection exception
Department of Finance Canada: Canada–United States Tax Convention

Disclaimer

This article is general information only and is not tax advice. Everyone's situation is different; please consult a CPA about your specific arrangements, and a qualified US tax preparer about US tax matters. Service fees are as set out in our written quote.