T1135 due to US stock ownership
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Thread: T1135 due to US stock ownership

  1. #1
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    T1135 due to US stock ownership

    There's a question on the Canadian tax return that asks: "Did you own or hold foreign property at any time in the year with a total cost of more than CAN$100,000?"

    If so, you have to file T1135 as described here: http://www.taxtips.ca/filing/foreign...-reporting.htm

    I understand the point about foreign real estate, but something that surprised me was this: foreign property includes shares in foreign companies, even if held in a Canadian brokerage (if non-registered).

    Let's say I have a non-registered account at my Canadian brokerage, in which I hold a few US stocks such as BRK.B, PG, AAPL. Does the CAD$ value of these stocks count towards that 100,000 threshold?

    And if I want to stop bothering with T1135, could I hold instead a Canadian domiciled ETF for US exposure such as XSP or ZSP -- and are these free from the reporting burdens?


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    Yes, the CAD$ cost base of those shares (BRK.B, PG, AAPL) count towards the $100,000 threshold.

    Canadian domiciled ETFs don't count towards the threshold. Also, registered holdings don't count towards the threshold. The new form really doesn't take long to fill out though.

  3. #3
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    James it's not the value of the stocks in the account. It is the the cost (what you paid) of the asset in the account. For example assume I bought shares in XYZ on the NYSE for $90,000 Canadian five years ago in a non-registered account. Today the are worth $125,000 Canadian. You answer "no" to the question "Did you own or hold foreign property at any time in the year with a total cost of more than CAN$100,000?".

    http://www.cra-arc.gc.ca/tx/nnrsdnts...35_fq-eng.html
    Last edited by leoc2; 2017-03-16 at 05:01 PM. Reason: Added CRA link

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    Quote Originally Posted by james4beach View Post
    Let's say I have a non-registered account at my Canadian brokerage, in which I hold a few US stocks such as BRK.B, PG, AAPL. Does the CAD$ value of these stocks count towards that 100,000 threshold?

    And if I want to stop bothering with T1135, could I hold instead a Canadian domiciled ETF for US exposure such as XSP or ZSP -- and are these free from the reporting burdens?
    Yes and yes. With regard to the first question, if all your US domiciled stock holdings are in brokerage accounts, you simply fill in Category 7 once.. name it such as "US stocks in XYZ brokerage". Given you likely also have a USD bank account in the USA, you would also fill out Cat 1 for the highest amount of USD you had in that account in 2016. It is the aggregate of your US domiciled holdings that counts towards the $100k CAD threshold.

  6. #5
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    Quote Originally Posted by james4beach View Post
    ... I understand the point about foreign real estate, but something that surprised me was this: foreign property includes shares in foreign companies, even if held in a Canadian brokerage (if non-registered) ...
    There's been several CMF threads on it ... but I guess you missed them.


    http://canadianmoneyforum.com/showth...0-T1135-anyone
    http://canadianmoneyforum.com/showth...options-trades


    Cheers


    PS

    Funds in foreign banks seem to also be included, as well as foreign issuer insurance policies and precious metals/gold certificates/futures contracts held outside Canada.
    http://www.advisor.ca/tax/tax-news/u...w-t1135-151683
    http://www.thebluntbeancounter.com/2...is-relief.html
    http://www.canadiancapitalist.com/ow...le-form-t1135/
    Last edited by Eclectic12; 2017-03-16 at 05:21 PM. Reason: added PS

  7. #6
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    Thanks everyone. As I earn US income I've been steadily sending it into Canada and never accumulating much in the USA.

    The sum of all my cash & 401(k) at US institutions, plus US stocks held anywhere, adds up to 90K CAD and it would be a few thousand lower if I used the cost instead of current value.


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