Personal name: simple but exposed
Buying in personal name means you appear on the deed as individual owner (or co-owner with your spouse). It's the simplest and most tax-efficient option for the majority of residential purchases.
Advantages
- No structure cost. No annual LLC filing fee, no EIN, no corporate accounting.
- US individual tax rate. On rental income, taxed on 1040-NR at progressive rates (10–37 %). For long-term capital gain, 0/15/20 %.
- Simple Canadian reporting. Rental income on T1 personal.
- Tenancy by the Entireties (TBE) available for married couples in FL — protection from one spouse's creditors, automatic transfer at death.
- Lady Bird Deed possible to avoid probate at your death.
Disadvantages
- No liability shield. If someone is injured on the property and sues, your personal Canadian and US assets are exposed.
- US estate tax potentially applicable at death if US assets > $60,000 USD (treaty mitigation, but Form 706-NA filing always required).
- FL probate at death without Lady Bird Deed or JTWROS — 6–12 months and several thousand dollars in cost.
When personal name is the right answer
Personal snowbird residence not rented, amount ≤ $1M USD, married couple (TBE possible), no high rental risk. Cover liability with a $1M–$2M umbrella insurance policy (≈ $200–400 USD/year) offsets most exposure.
Florida LLC: shield but CRA trap
The Limited Liability Company (LLC) is a Florida legal entity combining partnership flexibility with corporation-like limited liability. A very popular choice for US-resident foreign buyers holding rental real estate.
For Canadians, the tax trap
On the US side, a single-member LLC (one owner) is by default a disregarded entity: tax-invisible, owner reports directly as if owning in personal name. A multi-member LLC is by default taxed as a partnership.
But CRA doesn't follow this qualification. For CRA, an LLC is a corporation (Income Tax Folio S5-F1-C1, and CRA Views 2009-0307101I7). Consequences:
- LLC income (rental, capital gain) is considered as dividends to you when withdrawn.
- Double-taxation risk: US individual tax (on 1040-NR as disregarded entity) + CA tax on dividend, without foreign tax credit perfectly matching.
- The "disregarded entity" US doesn't align with the "regarded entity" Canadian — a costly mismatch.
Advantages anyway
- Liability shield: a claim within the LLC doesn't touch your personal Canadian assets.
- Partial anonymity: LLC is on the deed, not your name (subject to FinCEN disclosure 2024+).
- Estate flexibility: transfer LLC interests rather than the real estate itself.
- Avoids FL probate if well structured.
Mitigating the CRA trap
- Multi-member LLC with choice of corporation treatment (Form 8832 US) — cleaner alignment with CRA. But higher compliance costs.
- LLC treated as C-corp: US-level double taxation (corporate + dividend), but avoids CA mismatch.
- Consult a cross-border tax specialist before forming the LLC. Not a do-it-yourself.
Canadian corporation: probable double taxation
Holding US real estate via a Canadian corporation (e.g., family corporation, holdco) generally creates more problems than it solves for most buyers.
Issues
- FIRPTA still applies. The Canadian corporation is a "foreign person" under IRS — 15 % withholding at resale.
- US branch profits tax potentially (5 % via Canada-US treaty instead of standard 30 %, but still a cost).
- Complex US filing: Form 1120-F (foreign corporation US tax return).
- Double taxation: US corporate tax, then dividend taxable in Canada.
- US estate tax: property held by the corporation enters the corporation share estate (Canadian situs) — may avoid US estate tax if well structured, but requires analysis.
When defensible
- Very large wealth with sophisticated estate planning already in place.
- Multiple properties held as active rental business.
- Long-term reinvestment strategy in US assets without income repatriation.
US C-corporation: rare and costly
Very rare for residential. A US C-corporation holds the real estate, pays US corporate tax (21 % federal + state), then distributes dividend taxable in Canada (with 15 % withholding via treaty).
Certain double taxation. Defensible only for very specific investment structures with US partners. Avoid for personal residence or small rental.
Side-by-side comparison
| Criterion | Personal name | FL LLC | CA Corp |
|---|---|---|---|
| Initial cost | $0 | ≈ $250–500 | $1,500–5,000 |
| Annual cost | $0 | ≈ $138.75 (FL filing fee) + accounting | $500–2,000 + accounting |
| Liability shield | None | Strong | Strong |
| US taxation | Individual (10–37 %) | Disregarded = individual | 1120-F + branch profits |
| CA taxation | Personal direct | Double-taxation risk | Corporate then dividend |
| FIRPTA at sale | 15 % withholding | 15 % withholding | 15 % withholding |
| US estate tax | Applicable (treaty mitigation) | Applicable | Possibly avoided |
| FL probate | Yes unless Lady Bird/TBE | Avoided (interests transfer) | Avoided |
| CA reporting | Simple T1 | T1135 + LLC forms | T1134 + corporate return |
| Best for | Simple snowbird | Rental with tax advice | Very complex wealth |
Decision tree by profile
- Snowbird, personal residence, < $1M → Personal name + TBE if married + Lady Bird Deed + umbrella insurance.
- Airbnb / long-term rental, 1–3 properties → FL LLC with multi-member treatment as partnership or corporation, after cross-border tax consultation.
- 4+ property portfolio, active management → FL LLC or holding company structured by tax specialist.
- Wealth > $5M, sophisticated succession → Cross-border trust with cross-border tax attorney (US + CA).
- Cash buyer without rental intent, large estate → Consider Lady Bird Deed or trust by goal.
Structural mistakes to avoid
- Forming a single-member LLC without CA tax consultation. Top Canadian mistake. CRA/IRS mismatch is costly.
- Buying via nominee/strawman to hide ownership. Major legal risks, recommend absolutely against.
- Putting property in name of US-resident adult child. Unforeseen tax and estate consequences.
- Changing structure post-purchase without considering FIRPTA and doc stamps on transfer.
- Forgetting CRA T1135 filing if property > C$100,000 held abroad.
- Confusing LLC and corporation. Not the same. Different costs and tax consequences.
Every figure, rate, threshold, and deadline in this guide is drawn from a verifiable primary source listed at the bottom of the page. The article is updated whenever the underlying rules change, with a fresh review date stamped at the top.
Sources and references
All sources were publicly accessible at the last review date. Figures and rules may change; verify the current version before any decision.
- IRS Publication 519 — U.S. Tax Guide for Aliens. irs.gov/p519
- IRS Form 8832 — Entity Classification Election. irs.gov/form-8832
- CRA Income Tax Folio S5-F1-C1 — Determining an Individual's Residence Status. canada.ca/folios
- CRA Views 2009-0307101I7 — LLC characterization for Canadian tax purposes.
- Canada-US Tax Treaty Article XXIX-A — Branch profits tax. canada.ca/treaty/usa
- Florida Statutes Chapter 605 — Florida Revised Limited Liability Company Act. flsenate.gov
- FinCEN Beneficial Ownership Information (BOI) reporting. fincen.gov/boi
Logical next step
If LLC suits you, here's how to set it up correctly.