0

According to reports, Meghan Markle is receiving free accommodations at the home of a Canadian businessman.

Assuming this is true, and given Meghan is a US citizen, and considering the fair market value of staying in such a residence could be thousands of dollars per night would Meghan be responsible for taxes to the IRS and CRA?

  • 4
    The NY Post has been a rag for decades and in recent years it has deteriorated from that 'standard' :->) – Bob Baerker Jan 13 at 17:31
  • 3
    If it applies to Markle, why wouldn't it apply to the rest of us, as for instance when I visit friends and stay overnight? There's also the question of exactly how you would value such a stay, if the owner of the house doesn't regularly rent out rooms. – jamesqf Jan 13 at 18:01
  • 1
    The reason I thought it might be unique in this situation is because the value of the stay is certainly in the tens of thousands of dollars - equivalent to more than the gift tax maximum – CodyBugstein Jan 13 at 22:13
  • 6
    @CodyBugstein: Why, in your opinion, is the value of the stay "certainly in the tens of thousands of dollars"? I doubt the homeowner is renting out rooms on AirBnB, so there's no comparable price data. The homeowner has sunk costs for maintaining the house whether anyone stays there or not, so (unless they trash the place) the marginal costs of guests is maybe a bit of extra food & utility use. – jamesqf Jan 14 at 0:12
  • 1
    @CodyBugstein: No, it's not obvious at all. Citing those watchdog groups as "evidence" doesn't help, because they're wrong :-) – jamesqf Jan 14 at 18:09
14

In the US the giver of gifts has the gift-tax obligation if any exists, not the recipient. Even if letting them stay at the house was considered to be a gift it wouldn't be relevant to the IRS if the giver is Canadian.

I'm not familiar with gift-taxation in Canada.

| improve this answer | |
  • This is a good and correct answer, but the answer by @DJClayworth has the relevant Canadian information also. – Damila Jan 14 at 20:41
16

Canadian tax law is much simpler than the US. Canada does not have a "gift tax" either for the giver or the receiver, except for some very special cases.

US gift tax is paid by the giver, not the receiver, so would not be payable by a Canadian on a gift given in Canada.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.