# T1135 anyone?



## gardner (Feb 13, 2014)

I am now, I think, in T1135 territory. My combined non-registered holdings of VEA and VTI, and some other odds and sods, is > $100K
I gather from the T1135 FAQ that this all reportable.

Anyone have ideas what I should expect in terms of new scrutiny from Her Majesty because of this?


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## OnlyMyOpinion (Sep 1, 2013)

So not value but your total cost (generally ACB) was over $100k Cdn sometime in 2016? 
Note that your account's Book Value may be representative of your total ACB depending on the history of your holdings in that account.
http://www.taxtips.ca/filing/foreign-asset-reporting.htm


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## My Own Advisor (Sep 24, 2012)

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/frgn/1135_rprtng-eng.html

"Part A, a new simplified reporting method, for those taxpayers who held specified foreign property with a total cost of more than $100,000, but throughout the year was less than $250,000. This reporting method allows taxpayers to check the box for each type of property they held during the year rather than providing the details of each property. The country codes to be selected are based on the aggregate maximum cost amount of specified foreign property held during the year. Income from all specified foreign property and gain (loss) from the disposition from all specified foreign property during the year must also be reported.
Part B, the current detailed reporting method, will continue to apply to those taxpayers who, at any time during a year, held specified foreign property with a total cost of $250,000 or more."


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## gardner (Feb 13, 2014)

OnlyMyOpinion said:


> total cost was over $100k Cdn sometime in 2016?


Yes. Possibly in 2015 -- I need to look up some historic exchange rates to be sure.


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## AltaRed (Jun 8, 2009)

My Own Advisor said:


> http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/frgn/1135_rprtng-eng.html
> 
> "Part A, a new simplified reporting method, for those taxpayers who held specified foreign property with a total cost of more than $100,000, but throughout the year was less than $250,000. This reporting method allows taxpayers to check the box for each type of property they held during the year rather than providing the details of each property. The country codes to be selected are based on the aggregate maximum cost amount of specified foreign property held during the year. Income from all specified foreign property and gain (loss) from the disposition from all specified foreign property during the year must also be reported.
> Part B, the current detailed reporting method, will continue to apply to those taxpayers who, at any time during a year, held specified foreign property with a total cost of $250,000 or more."


Even for those over $250k CAD equivalent ACB, reporting is very simple for those with all their foreign investments in a brokerage account(s). It would be Category 7 on the form and no itemization is necessary either. There are only 4 numbers to calculate in CAD equivalent: 1) Maximum value during the year (month and BoC average forex for that month), 2) Maximum value at year end (BoC average month forex for December), 3) Income in CAD equivalent (can use BoC annual average forex rate), 4) cap gain/loss converted to CAD equivalent for each sale with forex based on day of Settlement.

I've already done my T1135 except for income (for which I will wait for my T5 to tell me). And at no cost to you from the BoC website....... December monthly USD forex = 1.332935 and annual average for 2016 is 1.3248064 

People with static US domiciled holdings for 2016 may find January to be the highest month rather than Nov or Dec because forex was 1.422315. Those still adding to their US domiciled portfolio will likely find Nov or Dec to be the highest max value month given the Trump effect on markets.

Added: Most tax software will now Netfile T1135 for you.


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## gardner (Feb 13, 2014)

Turns out I indeed crossed the $100K threshold in 2015 so I will have to file a T1135 as an amendment to that year, as well as again this year. I have a ways to go to get to "part B" territory. I expect another round of spurious reassessments going back 11 years now. It's starting to get silly.


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## AltaRed (Jun 8, 2009)

gardner said:


> Turns out I indeed crossed the $100K threshold in 2015 so I will have to file a T1135 as an amendment to that year, as well as again this year. I have a ways to go to get to "part B" territory. I expect another round of spurious reassessments going back 11 years now. It's starting to get silly.


You may want to re-think that...if it is marginally over....and depending on the forex rate(s) you used (see below). There are severe penalties for failing to file on time. Make sure you do file your 2016 version though on time.


> Failure to file Form T1135 on time may result in penalties that accumulate at the rate of $25 for each day you are late, up to a maximum of $2,500. If CRA determines that your failure to report constitutes “gross negligence”, the penalties jump to $500 for each month, up to a maximum of $12,000.


http://www.wbli.ca/t1135-penalty/

Note the part under "Late T1135 Penalties" regarding Voluntary Disclosure. I'd suggest you consider that route for 2015 saying something to the effect that you had no idea you would be over $100k CAD equivalent in 2015 and only found out in retrospect when lookiing at 2016.


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## gardner (Feb 13, 2014)

AltaRed said:


> Voluntary Disclosure.


Seems like overkill, but I've filled out the paperwork for the VDP as well as the T1135. It seems hard to believe they would really apply the penalties for an issue that does not affect the actual taxes paid, but better safe than sorry, I guess.


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## AltaRed (Jun 8, 2009)

gardner said:


> Seems like overkill, but I've filled out the paperwork for the VDP as well as the T1135. It seems hard to believe they would really apply the penalties for an issue that does not affect the actual taxes paid, but better safe than sorry, I guess.


You could always ask a tax accountant friend of yours if the VDP is the best route. My belief it is because it acknowledges you messed up....rather than just a 270 day late filing.


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