to enhance compliance with tax laws that require reporting of foreign-source income
to increase taxpayers' awareness of these laws
to provide information to the CRA for the purpose of verifying taxpayers' compliance with these laws
to better target international tax evasion and aggressive tax avoidance
Who has to report?
Form T1135, Foreign Income Verification Statement, must be filed by:
Canadian resident individuals, corporations, and certain trusts that, at any time during the year, own specified foreign property costing more than $100,000
certain partnerships that hold more than $100,000 of specified foreign property
What property has to be reported?
Specified foreign property is defined in subsection 233.3(1) of the Income Tax Act and includes:
funds or intangible property (patents, copyrights, etc.) situated, deposited or held outside Canada
tangible property situated outside Canada
a share of the capital stock of a non-resident corporation
shares of corporations resident in Canada held outside Canada
an interest in a non-resident trust that was acquired for consideration
an interest in a partnership that holds a specified foreign property unless the partnership is required to file Form T1135
a property that is convertible into, exchangeable for, or confers a right to acquire a property that is specified foreign property
a debt owed by a non-resident, including government and corporate bonds, debentures, mortgages, and notes receivable
an interest in a foreign insurance policy
precious metals, gold certificates, and futures contracts held outside Canada
Specified foreign property does not include:
a property used or held exclusively in carrying on an active business
a share of the capital stock or indebtedness of a foreign affiliate
an interest in a trust described in paragraph (a) or (b) of the definition of exempt trust in subsection 233.2(1)
a personal-use property as defined in section 54
an interest in, or a right to acquire, any of the above-noted excluded foreign property
Reporting the sale of your principal residence
If you sold or if you were considered to have sold your property in 2022 and it was your principal residence, you have to report the sale and designate the property on Schedule 3, Capital Gains (or Losses). In addition, you also have to complete Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust). Complete only page 1 of Form T2091(IND) if the property you sold was your principal residence for all the years you owned it, or for all years except one year, being the year in which you replaced your principal residence.
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