T1135, changed again for 2015! Some simplification?

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T1135, changed again for 2015! Some simplification?

Post by Peculiar_Investor »

Courtesy of The Blunt Bean Counter: The T1135 Form – Yet Again!
This will be the fifth time I am writing about the T1135 Foreign Income Verification Statement since September, 2013. Today I am discussing the implementation of the April, 2015 Federal budget proposal in which the Conservatives promised to simplify the reporting requirements where your cost of foreign property is less than $250,000.

This proposal has now been implemented and a new T1135 has been released.
The link to the new T1135 form.

For those interested or impacted, I'd recommend reading the linked article, particularly the section on Qualifying for the Simplified Method. I've skimmed it and will probably spend more time reviewing it when it comes closer to preparing 2015 tax returns.
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Re: T1135, changed again for 2015! Some simplification?

Post by MALDI_ToF »

ARRRRGGGG :evil:

I question the importance of this for people in my position where the only foreign property owned are US stocks held in Canadian institutions. I wish I could just sign a form telling my bank to just send to CRA a list of my holdings. They already know the income generated from the T slips issued.

I wonder if this will change again next year...
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Re: T1135, changed again for 2015! Some simplification?

Post by AltaRed »

It is dumb, especially when most, if not able to use the simplified method, would fill in only Section 7 (and possibly Section 1) anyway.
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Re: T1135, changed again for 2015! Some simplification?

Post by AltaRed »

Which raises a question in terms of filling out the form in CAD terms. I assume one uses the following* from the Instructions for Cat 1-7 as well as for the simplified method:
The following summarizes how other amounts of the form should be translated:
• Maximum funds held during the year – the average exchange rate for
the year.
• Funds held at year end – the exchange rate at the end of the year.
• Maximum fair market value during the year – the average exchange rate
for the year.
• Fair market value at year end – the exchange rate at the end of the year
* except for the Cost box in Cat 2-6 which the instructions do say, exchange rate in place at time of transaction.

Fortunately, I only have to use Cat 1 and 7. My foreign equities holdings peaked, in USD terms, in February with a close second in May, but if I had to use CAD equivalent of the day for the end of any given month, the maximum during the year in CAD equivalent would likely be December.

http://www.xe.com/currencycharts/?from= ... SD&view=1Y
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Re: T1135, changed again for 2015! Some simplification?

Post by Arby »

It was nice to learn that the T1135 can now be Netfiled (with Ufile) rather than having to send a separate paper copy of the T1135 to CRA. And I also get a confirmation that my T1135 has been received. It always bugged me that there were substantial fines for not submitting the T1135, but CRA was not able to confirm whether they had received my paper copy of the T1135.
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Re: T1135, changed again for 2015! Some simplification?

Post by AltaRed »

Yes, UFile (and I think TurboTax) has finally caught up to StudiioTax et al that had it last year. Submission went well.
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Re: T1135, changed again for 2015! Some simplification?

Post by scorpionman »

No, Turbotax does not netfile it for 2015, perhaps for 2016 -

https://turbotax.community.intuit.ca/qu ... -year-2015
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Re: T1135, changed again for 2015! Some simplification?

Post by gsp_ »

scorpionman wrote:No, Turbotax does not netfile it for 2015, perhaps for 2016 -

https://turbotax.community.intuit.ca/qu ... -year-2015
Good thing they don't charge for their lousy products while free ones had that capability for 2014.

Oh wait!

Appalling behaviour. The problem is you only find out at the very end of completing your return. I guess I should have checked but the thought of not instituting this functionality with an extra year of lead in never crossed my mind.
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Re: T1135, changed again for 2015! Some simplification?

Post by BRIAN5000 »

Filling out the T1135 - have I got this right?

If the highest cost base during the year is more than $100,000 but less than $250,000 you can use the simplified form.

If it's all US shares, US mutual funds or US domiciled ETF's held in a Canadian brokerage you tick that box.

One Country code United States

You fill in the amount of any income earned

You fill in any gains or loss's

That's it?
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Re: T1135, changed again for 2015! Some simplification?

Post by scorpionman »

I think so.

Also, I am assuming,

- cost or fmv if using part 7 is gross (i.e. don't deduct investment loans against the assets).
- if 1 or more assets are $250,000 or more, than you list all foreign assets you own even if the 2nd,3rd,etc..are as little as $1.

Is this correct?
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Re: T1135, changed again for 2015! Some simplification?

Post by BRIAN5000 »

- if 1 or more assets are $250,000 or more, than you list all foreign assets you own even if the 2nd,3rd,etc..are as little as $1.
Don't know for sure but I found this http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... g.html#h11

Other frequently asked questions
46. How do I report specified foreign property held through a Canadian broker?

Taxpayers can provide the details of each specified foreign property in the appropriate category, however, if the property is held with a Canadian registered securities dealer (as defined in subsection 248(1) of the Income Tax Act) or with a Canadian trust company as determined under paragraph (b) of the definition of a restricted financial institution in subsection 248(1)), taxpayers are permitted to report the aggregate amount of all specified foreign property on a country-by-country basis in Category 7, "Property held in an account with a Canadian registered securities dealer or a Canadian trust company".

And from instructions on the form, so if you have more than one broker Broker by Broker?

http://www.cra-arc.gc.ca/E/pbg/tf/t1135/t1135-15e.pdf

The table for this category should be completed as follows:
• all of the property held with a particular securities dealer or trust company
should be aggregated on a country-by-country basis;
• it is also acceptable to provide aggregate totals for each particular
account on a country-by-country basis;
• refer to the "country code" instructions above to determine the
appropriate country for each property; and
• the maximum fair market value during the year may be based on the
maximum month-end fair market value.
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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Re: T1135, changed again for 2015! Some simplification?

Post by AltaRed »

I only use Cat 7 for my US domiciled investments in my brokerage account. I use investment statement totals and fill out 1 line in Cat 7.
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Re: T1135, changed again for 2015! Some simplification?

Post by travesty »

gsp_ wrote:
scorpionman wrote:No, Turbotax does not netfile it for 2015, perhaps for 2016 -

https://turbotax.community.intuit.ca/qu ... -year-2015
Good thing they don't charge for their lousy products while free ones had that capability for 2014.

Oh wait!

Appalling behaviour. The problem is you only find out at the very end of completing your return. I guess I should have checked but the thought of not instituting this functionality with an extra year of lead in never crossed my mind.
Agreed. It is particularly unusual since TurboTax is all into segmenting their market by return complexity - it's odd they didn't make T1135 submission part of the "platinum tier" or whatever they call it. Anyway, this is the last year I use TurboTax. Next year I'll try the "pay as much as you want" SimpleTax, which includes the T1135.
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Re: T1135, changed again for 2015! Some simplification?

Post by gsp_ »

Hallelujah. Seems like TurboTax finally allows netfiling the T1135 in 2016. https://turbotax.community.intuit.ca/qu ... -year-2016

Anyone actually netfiled a T1135 with TT?
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Re: T1135, changed again for 2015! Some simplification?

Post by scorpionman »

Yeah, but you must be careful to do it twice, the T1 and T1135 are netfiled one after the other as separate events, it was a little confusing :)
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Re: T1135, changed again for 2015! Some simplification?

Post by gsp_ »

Thanks for the confirmation and warning. :thumbsup:
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Re: T1135, changed again for 2015! Some simplification?

Post by Peculiar_Investor »

For those wrestling with the T1135 this article, The Blunt Bean Counter: T1135 - Some Guidance on Common Issues, might be helpful.
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