Foreign Income Verification Statement

Posted Nov 19th, 2015

Foreign Income Verification Statement

Other the past three years, this long standing filing requirement on Canadian Taxpayers holding Foreign Property has been changed and altered many times.

For the 2015 year, filing requirements have changed again. therefore a review of what is currently required is beneficial.

Who has to file form T1135?
All Canadian resident taxpayers are required to file if at any time throughout the year,the total cost of specified foreign property was more than $100,000 CDN.

What is Specified Foreign Property?
Specified Foreign Property is an extensive list so rather than list our what it is, let’s list what does not have to be reported.
– Personal Use Property such as a winter home that is not used for rental income purposes
– Mutual Funds
– Registered Investments such as a 401K
– Property used exclusively to earn “Active Business Income”

What Information is Needed?
In general, form T1135 – Foreign Income Verification Statement will require the following information for each foreign holding:
– Type of Investment or Holding
– Country where asset is located
– The maximum cost at anytime throughout the year
– The cost at the end of the year
– The amount of income earned from the investment
– The amount of any Capital Gains/Losses realized

With the constant evolution of this reporting requirement, taxpayers should remain diligent in recording and reporting foreign holdings as penalties for non-compliance are expensive.

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