Questions about T1135 Form

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Jun 9th, 2021 6:38 am

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Jun 1st, 2020 2:34 am

kwscott [OP]: Jr. Member; Mar 6, 2018; 197 posts; 157 upvotes

Jun 1st, 2020 2:34 am

Questions about T1135 Form

I just realize that I might have to fill in this form since I started trading US securities in the US Cash account in 2019. I have a few questions.

The condition states that: If the total cost of all specified foreign property held at any time during the year exceeds $100,000 but was less than $250,000, you are required to complete either Part A or Part B

I've received a tax package from TD with a section that details the Foreign Properties that I held.

1. Under each month in the table there is a total amount. Do I add up all of the months from January to December to decide if I am over the $100,000 / $250,000 threshold?
2. Or do I use the one highest amount of the month in 2019 to determine if I am over the $100,000?

Thanks in advance.

9 replies

Jun 1st, 2020 3:11 pm

WetCoastGuy: Deal Addict; Dec 24, 2007; 1652 posts; 2038 upvotes; BC

Jun 1st, 2020 3:11 pm

The condition says "at any time during the year" exceeds $100,000. So technically it means the highest cost of your foreign holdings at any day (point of time). However, the CRA will accept that "The maximum cost amount during the year can be based on the maximum month-end cost amount during the year." as stated on the form

So you go with #2. the highest amount of the month

+2

Jun 1st, 2020 4:50 pm

kwscott [OP]: Jr. Member; Mar 6, 2018; 197 posts; 157 upvotes

Jun 1st, 2020 4:50 pm

Thank you for the reply! The CRA rep said so as much when I called this morning. It’s good to have two sources of confirmation. Cheers.

WetCoastGuy wrote: ↑ The condition says "at any time during the year" exceeds $100,000. So technically it means the highest cost of your foreign holdings at any day (point of time). However, the CRA will accept that "The maximum cost amount during the year can be based on the maximum month-end cost amount during the year." as stated on the form

So you go with #2. the highest amount of the month

+1

Jun 1st, 2020 7:36 pm

craftsman: Deal Expert; Jan 27, 2006; 19542 posts; 12621 upvotes; Vancouver, BC

Jun 1st, 2020 7:36 pm

Remember that it's an informational form so it doesn't affect the taxes paid in anyway for 2019. And that there are heavy fines from the CRA for any misinformation or delays in filing that form which isn't exactly fair as the form is informational.

Jun 1st, 2020 8:45 pm

kwscott [OP]: Jr. Member; Mar 6, 2018; 197 posts; 157 upvotes

Jun 1st, 2020 8:45 pm

Absolutely. And for that very reason that's why I asked the question here as well as the CRA rep I spoke to this morning for clarification. I've never had to report foreign properties before with stocks that I held because they were always held in RRSP/TFSA, but last year I extended my trading to my cash account so this is necessary indeed. Filed and dusted.

craftsman wrote: ↑ Remember that it's an informational form so it doesn't affect the taxes paid in anyway for 2019. And that there are heavy fines from the CRA for any misinformation or delays in filing that form which isn't exactly fair as the form is informational.

Apr 23rd, 2021 11:20 pm

Extrahard: Sr. Member; Nov 22, 2017; 842 posts; 551 upvotes

Apr 23rd, 2021 11:20 pm

What is the purpose of the T1135 informational form? I own two real estate properties in a 3rd world country that are valued at about $400k CAD total (a guestimate). I've owned these properties for over 10 years and unfortunately due to my lack of tax knowledge (not an excuse I know) just learned about this form and will be filing this year. I am wondering if it would have any personal income tax implication, can this be back tracked and reported or am I able to circumvent this by not filing at all and claiming its for personal use - which it is since I have not received any income from them.

Apr 24th, 2021 5:23 am

yvrbanker: Sr. Member; May 2, 2019; 664 posts; 879 upvotes; Vancouver

Apr 24th, 2021 5:23 am

Extrahard wrote: ↑I've owned these properties for over 10 years and unfortunately due to my lack of tax knowledge (not an excuse I know) just learned about this form and will be filing this year. I am wondering if it would have any personal income tax implication, can this be back tracked and reported or am I able to circumvent this by not filing at all and claiming its for personal use - which it is since I have not received any income from them.

You should be good. The CRA has an answer: if you didn't have income (or a reasonable expectation of income) from real estate, the CRA considers it a personal use property. So it's not a specified foreign property. It does not have to reported in T1135. If you don't have over 100K (cost) in other reportable foreign property, then you don't need T1135. Make sure you have a consistent answer in you main tax return (T1).

For those who had to file T1135 in previous years but didn't, the only right way to correct it is to use the Voluntary Disclosures Program. Filing without it would trigger automatic late filing penalties, which are cruel.

+2

Apr 24th, 2021 2:04 pm

craftsman: Deal Expert; Jan 27, 2006; 19542 posts; 12621 upvotes; Vancouver, BC

Apr 24th, 2021 2:04 pm

yvrbanker wrote: ↑ You should be good. The CRA has an answer: if you didn't have income (or a reasonable expectation of income) from real estate, the CRA considers it a personal use property. So it's not a specified foreign property. It does not have to reported in T1135. If you don't have over 100K (cost) in other reportable foreign property, then you don't need T1135. Make sure you have a consistent answer in you main tax return (T1).

For those who had to file T1135 in previous years but didn't, the only right way to correct it is to use the Voluntary Disclosures Program. Filing without it would trigger automatic late filing penalties, which are cruel.

That's if the CRA agrees. I could see the CRA thinking that while ONE foreign real estate property may be OKAY (ie vacation home or handed down from a previous generation), two foreign properties may be considered something else unless the owner can prove that it isn't. Considering that the T1135 is an informational form (no taxes assessed on what ever is on the form), it might be safer to do the disclosure program rather than having the CRA start asking why it wasn't disclosed and start digging into your affairs.

+1

Apr 24th, 2021 3:36 pm

HammerRFDer: Deal Addict; Jul 13, 2007; 1142 posts; 633 upvotes; Toronto

Apr 24th, 2021 3:36 pm

Extrahard wrote: ↑ What is the purpose of the T1135 informational form? I own two real estate properties in a 3rd world country that are valued at about $400k CAD total (a guestimate). I've owned these properties for over 10 years and unfortunately due to my lack of tax knowledge (not an excuse I know) just learned about this form and will be filing this year. I am wondering if it would have any personal income tax implication, can this be back tracked and reported or am I able to circumvent this by not filing at all and claiming its for personal use - which it is since I have not received any income from them.

Be careful here. Current value is irrelevant. What matters is the cost/value when you acquired/inherited it. If you inherited it 10 years ago and it was worth CAD$99k then, this won't trigger a T1135 filing obligation. But buying $1001 in TSLA in your cash account today would push you over the $100k *cost* threshold if that $99k property wasn't 'personal use property'

Another way, if you inherited a rental property 10 years ago that was worth $125k 10 years, and it crashed to $75k, you'd still have to continue filing T1135.

+3

Jun 9th, 2021 6:38 am

IrwinW: Deal Addict; Oct 14, 2015; 1618 posts; 1631 upvotes

Jun 9th, 2021 6:38 am

Posting this for general information, and so that it shows up when someone does a search.

Is Brookfield Renewable Corporation a Specified Foreign Property?

Brookfield Renewable Corporation is not a Specified Foreign Property and therefore does not need to be reported on Form T1135 Foreign Income Verification Statement.

https://bep.brookfield.com/bepc/stock-a ... nformation

Tags: T1135 , BEPC

+1

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