Income tax form T1135 for year 2013

ViRedFlag wrote: ↑I am doing my T1135 for year 2013 (voluntary disclosure) and I have a question.

My understanding is this:
For all stocks/ETFs that I received T3/T5s I do not need to add them to T1135 form. I simply answer to question "Is any of the Specified Foreign Property held during the year subject to the exclusion" as "Yes".[INDENT]From the form: Where the reporting taxpayer has received a T3 or T5 from a Canadian issuer in respect of a specified foreign property for a taxation year, that specified foreign property is excluded from the T1135 reporting requirement for that taxation year. If any of the Specified Foreign Property held during the year is subject to the above exclusion,
[/INDENT]

Out of 10 ETFs, I have 2 ETFs that did not have any dividends reported in 2013, but they were sold in 2013.

So, for the 8 ETFs that I received T3/T5 - is that right that I can completely not even mention them on form T1135.

Yes I believe that applies if you opt to use the T3/T5 exception for everything exclusively.

And for my 2 ETFs that I did not recieve T3/T5 - do I use "2013 Transitional Reporting Method", or should I report them as 2 separate properties.

Transitional.

I just filed my T1135 for my 2014 taxes using Netfile. In doing so I went back to 2013 to try and understand the meaning of the T3/T5 reporting exception and the 2013 Transitional Reporting Method.

Here is what I understand to be the case for your situation.

As it states on the 2013 form, you cannot use both the T3/T5 reporting exception and the Transitional Reporting Method at the same time. After you use the Transitional Method with a Canadian registered securities dealer, you cannot use the T3/T5 reporting exception with any other account with a Canadian securites dealer. On your T1135, you should probably choose the Transitional Method since that greatly simplifies reporting details for each property such as omitting the individual country codes relating to domicile of the EFT issuing institution, the cost amount at year end and the maximum cost amount during the year. You still need to report the combined income/loss and the total capital gains/capital loss. Note that these last two amounts are the gross amounts and not, for example, the “taxable” portion of the capital gain.

If your both your two ETFs (which presumably hold foreign investments) without T3/T5 are held at the same Canadian registered securities dealer (brokerage, bank) you only need to report the combined value of the ETFs in Category 6 (“Other property outside of Canada”) of your T1135. Even though they were sold during 2013 and you received no dividends, you would still report the income/loss and gain (loss) on disposition.

I would probably include the maximum cost amount, etc., of the remaining 8 ETFs for which CRA would have received copies of T3/T5s from your dealer anyways. You should not get penalized for disclosing redundant information.

Interestingly, you can file an amended T1135 applying the Transitional Method after previously filing using the T3/T3 exception. And it seems that in 2014 you can’t use the Transitional Method at all. You can, however, lump all your investments in an aggregate fashion under a new Category 7 provided they are held with a Canadian registered securities dealer or trust company.

http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... ng.html#h4

http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... g.html#h10