T1135 Form

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kcowan
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Re: 2014 - T1135 Form

Post by kcowan »

CRA Says: No need to file if all investments are covered by Cdn Broker in T3/T5 wrote:41. Form T1135 states that where a taxpayer has received a T3 or T5 from a Canadian issuer for a specified foreign property for a tax year, that property is excluded from T1135 reporting for that year. Does that mean the property is also excluded from the calculation of the $100,000 threshold?

If this exception applies to you, you do not have to complete the detailed reporting requirements of form T1135 for that property. However, you still have to take the property into account in determining whether the total cost amount of all specified foreign property you held at any time in the year exceeds $100,000, and whether or not you need to submit a form T1135
That is a relief. Also ADRs are attributed to their home country and do not contribute to the US total.
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Re: 2014 - T1135 Form

Post by DavidR »

Keith, question 41 falls under CRA's heading "Frequently asked questions specific to reporting for the 2013 tax year"
As discussed previously, the T3/T5 reporting exception does not apply to 2014 and the check box does not appear on the 2014 version of the T1135 form.
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Re: 2014 - T1135 Form

Post by kcowan »

OK thanks. I got into the Q&A pretty deeply and did not recognize that.
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Re: 2014 - T1135 Form

Post by gsp_ »

DavidR wrote:
What's new - Individuals can electronically file Form T1135 for the 2014 tax year. As of February 9, 2015...
http://www.cra-arc.gc.ca/E/pbg/tf/t1135/README.html
Has anyone filed this form electronically? It doesn't appear possible using TurboTax. :evil: The program keeps telling me to print and mail the form.

If you were successful filing electronically, what program did you use?
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Re: 2014 - T1135 Form

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CRA Says: No need to file if all investments are covered by Cdn Broker in T3/T5 wrote:41. Form T1135 states that where a taxpayer has received a T3 or T5 from a Canadian issuer(*) for a specified foreign property for a tax year, that property is excluded from T1135 reporting for that year...
1. Where in the T1135 and instructions does it say that? I don't see any mention of T3/T5 slips in the T1135 form and instructions.
2. Moreover this seems at odds with Section 7 of the T1135 form itself (see page 1 as well as the Instructions part of the form.)
3. Further even if the exemption applies what are we supposed to do with securities like BRK that pay no dividends/distributions and thus are not included in any T-slips that are issued.
4. Worse why is it that an acknowledged tax pro like Jamie Golombek seems to be totally oblivious to CRA's "generous offer" to simplify our tax lives? Surely someone who prepares tax returns and completes T1135 for a living out to be aware of this. And yet... What you need to know about foreign investments on your tax return this year
While the 2014 T1135 may be simpler than in other years, especially if you can use the new simplified aggregated reporting method, it still seems unnecessary to require taxpayers to report on the T1135 anything held in a Canadian brokerage account to begin with.

After all, the CRA is already receiving detailed information on income and gains on all property (Canadian and foreign) held in these accounts through the traditional T3, T5 and T5008 reporting.

The additional T1135 reporting required for Canadian brokerage accounts seems like overkill to me.
Jean and Paul may be responsible for introducing the T1135 regime in the first place, but it was Steve, Jimbo and Joke who managed to "simplify" it into a confusing, overly complicated mechanism for extracting onerous and gratuitous penalties from otherwise honest, law-abiding taxpayers who don't happen to have advanced degrees in tax law and accounting :evil:

(*) Is it possible to receive T3 or T5 slips from non-Canadian issuers? In particular US issuers send out US IRS 1099 slips in respect of income paid out by their securities. Presumably overseas issuers issue similar slips in compliance with their national tax regimes. Why would any of them issue T3/T5 slips for a jurisdiction that's out of their jurisdiction.
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Re: 2014 - T1135 Form

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gsp_ wrote:If you were successful filing electronically, what program did you use?
StudioTax appears to be able to file the T1135 electronically. It's available for free if you want to try it.
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Re: 2014 - T1135 Form

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SimpleTax should be able to file T1135 electronically too. I will be filing mine soon.
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Re: 2014 - T1135 Form

Post by gsp_ »

Laika wrote:StudioTax appears to be able to file the T1135 electronically. It's available for free if you want to try it.
DenisD wrote:SimpleTax should be able to file T1135 electronically too. I will be filing mine soon.
Thanks. It's disconcerting that a product marketed as premium isn't able to do what lower priced or even free ones are.

Printed and mailed another T1135, just as in previous years. Hopefully it'll be the last.
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Re: 2014 - T1135 Form

Post by Peculiar_Investor »

Norbert,
Norbert Schlenker wrote:Funds held by a Canadian broker are not foreign property that needs to be reported on a T1135.
The follow-up posts from various others, particularly,
DavidR wrote:Keith, question 41 falls under CRA's heading "Frequently asked questions specific to reporting for the 2013 tax year"
As discussed previously, the T3/T5 reporting exception does not apply to 2014 and the check box does not appear on the 2014 version of the T1135 form.
seem at odds with your statement and my understanding for 2014.
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Re: 2014 - T1135 Form

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FWIW, all of my ex-canada foreign property resides on the USD side of one brokerage account. I used 7. to report 'foreign securities in xxxxxx brokerage account' and reported aggregated numbers for my foreign property as a one line entry. Had I had foreign securities in another brokerage account, I would have entered another line in 7 for the numbers in that brokerage account.
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Re: 2014 - T1135 Form

Post by kcowan »

Laika wrote:Unfortunately, things aren't always that straightforward. I hold one ADR stock (RDS) in my USD account. Because the company is incorporated in the UK, I think it needs to be separated out in Category 7. So, while most of my US holdings had a maximum FMV in Dec, RDS peaked last summer. This form is a headache.
The way I interpret the CRA is that ADRs should be reported in their home country and only if that country holdings are over C$100k on a cost basis.

I don't know if I am right but it is good enough for me.
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Re: 2014 - T1135 Form

Post by kcowan »

deaddog wrote:I assume that a couple could have up to 199K in a joint account and not have to file.
Only if they each contributed 50% on a cost basis!
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Re: 2014 - T1135 Form

Post by gsp_ »

Peculiar_Investor wrote:Norbert,
Norbert Schlenker wrote:Funds held by a Canadian broker are not foreign property that needs to be reported on a T1135.
The follow-up posts from various others, particularly,
DavidR wrote:Keith, question 41 falls under CRA's heading "Frequently asked questions specific to reporting for the 2013 tax year"
As discussed previously, the T3/T5 reporting exception does not apply to 2014 and the check box does not appear on the 2014 version of the T1135 form.
seem at odds with your statement and my understanding for 2014.
Norbert was responding to this post:
Whenever my $US cash balance reaches US$25,000, I convert the balance to $CAD. Since this is well below US$100,000 am I safe from the T1135 ?
I took Norbert's "funds" to mean cash which doesn't need to be reported when held with a Canadian broker.
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Re: 2014 - T1135 Form

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DenisD wrote:SimpleTax should be able to file T1135 electronically too. I will be filing mine soon.
It seemed to do it fine with mine. It least we can do this electronically now. Beats mailing it in.
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Re: 2014 - T1135 Form

Post by DenisD »

Looks like the T1135 will change again next year.
The rules for reporting specified foreign income are changing again.

Responding to longstanding frustrations with Form T1135, the government announced today that there will be a streamlined process for taxpayers with between $100,000 and $250,000 in specified foreign income.
http://www.advisor.ca/tax/tax-news/lowe ... 135-181366

I think they mean foreign property, not foreign income.
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Re: 2014 - T1135 Form

Post by Come on Eileen »

DenisD wrote:Looks like the T1135 will change again next year.
The rules for reporting specified foreign income are changing again.

Responding to longstanding frustrations with Form T1135, the government announced today that there will be a streamlined process for taxpayers with between $100,000 and $250,000 in specified foreign income.
http://www.advisor.ca/tax/tax-news/lowe ... 135-181366

I think they mean foreign property, not foreign income.
Correct, it is foreign property.

http://www.crowehorwath.net/mackay/insi ... rnational/
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Re: 2014 - T1135 Form

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What's new - Individuals can electronically file Form T1135 for the 2014 tax year. As of February 9, 2015...

http://www.cra-arc.gc.ca/E/pbg/tf/t1135/README.html
Ufile says I need a paper copy and to mail it in. I just checked for updates to Ufile, nothing, what's with that.
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Re: 2014 - T1135 Form

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BRIAN5000 wrote:Ufile says I need a paper copy and to mail it in. I just checked for updates to Ufile, nothing, what's with that.
There's a lot of complaints on the UFile Support Community about that. UFile is not the only one to NOT allow filing of the T1135 electronically with no plans to do it this year, e.g. maybe even TurboTax, but it is disappointing for a major provider of tax software NOT to have made the capability for this year. As I understand it, some of the freebies already have that capability.
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T1135 - option writers

Post by HomerJ »

If like myself you write options, naked puts/calls and covered calls, these do not have to be reported on T1135.

• commodity or future contracts, options or derivatives that constitute a
right to, a right to acquire
, or an interest in, specified foreign property....


The wording is clear-ish, and since even accountants at $200 an hour are confused, I called CRA, spoke to a lackey who conferred with his Resource Officer (the folks deeper in the dungeons with thicker glasses) who concurred with the fact that:
  • When you WRITE an option, you do NOT have the right but rather the OBLIGATION to purchase the shares if assigned, or supply them if exercised.
I will call again to get a second lackey's ID number to further pad this interpretation, I urge anyone else who writes options to do the same.
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Re: 2014 - T1135 Form

Post by milo »

If I own shares of say AAPL (I assume its a non-resident corporation) in my TDDI non-registered account, (and my total Specified Foreign Property is more than $100K).

should I fill in

Category 2 : Shares of non-resident corporations (other than foreign affiliates)
AND
Category 7

?
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Re: 2014 - T1135 Form

Post by MALDI_ToF »

milo wrote:If I own shares of say AAPL (I assume its a non-resident corporation) in my TDDI non-registered account, (and my total Specified Foreign Property is more than $100K).

should I fill in

Category 2 : Shares of non-resident corporations (other than foreign affiliates)
AND
Category 7

?
My understanding is that it would only be in Cat 7 because it is in a Canadian brokerage (TDDI in your example). I think Cat2 would come in if you owned the shares directly (like physical certificates in your safe) or perhaps if the shares were in a non-Canadian brokerage, like a US brokerage (perhaps you used to be an American citizen and you still have some accounts down there).
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Re: 2014 - T1135 Form

Post by AltaRed »

I used Category 7.
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Re: 2014 - T1135 Form

Post by IdOp »

My take is that it's EITHER Category 2, OR Category 7 (but not both). Choose whichever works best/easiest for you.
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Re: 2014 - T1135 Form

Post by milo »

milo wrote:If I own shares of say AAPL (I assume its a non-resident corporation) in my TDDI non-registered account, (and my total Specified Foreign Property is more than $100K).

should I fill in

Category 2 : Shares of non-resident corporations (other than foreign affiliates)
AND
Category 7

?
what about for year 2013 - "T1135 (13)" ?
since Category 7 did not exist, would I enter in
Category 2 : Shares of non-resident corporations (other than foreign affiliates)
?

I am thinking of doing a voluntary disclosure since I missed up for 2013 filing.
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Re: 2014 - T1135 Form

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