Step-by-Step Guide to Filling Out Form T1135

Here's a step-by-step guide to completing a Foreign Income Verification Statement (Form T1135) for the Canada Revenue Agency (CRA):

Step-by-Step Guide to Filling Out Form T1135

Step 1: Gather Your Information

• Collect all relevant documents related to your foreign property, including statements, receipts, and any other financial records.

• Ensure you have details of all foreign investments and properties including the income generated, if any.

Step 2: Determine Your Reporting Requirement

• Determine if you are required to file Form T1135. You must file if the total cost amount of your foreign property exceeded CAD 100,000 at any time during the year.

• Foreign property includes funds in foreign bank accounts, shares in foreign companies, real estate outside Canada, and more.

Step 3: Download and Print Form T1135

• Visit the CRA website and download Form T1135, or you can access it here.

Step 4: Complete Part A – Identification

• Box 1: Enter your name (or corporation name if applicable).

• Box 2: Enter your social insurance number (SIN) or business number (BN).

• Box 3: Enter the tax year for which the form is being completed.

Step 5: Complete Part B – Reporting Foreign Property

• Tick Box: Indicate whether you are reporting under the detailed method or simplified method.

  • Use the simplified method if the total cost of your foreign property was more than CAD 100,000 but less than CAD 250,000 throughout the year.

  • Use the detailed method if the cost exceeded CAD 250,000.

Step 6: Complete Section 1 – Property with a Cost Amount of Less Than CAD 100,000 Each (Simplified Method Only)

• Tick Boxes: Tick the appropriate boxes to indicate the types of property you held and whether they generated income.

Step 7: Complete Section 2 – Property with a Cost Amount of CAD 100,000 or More Each (Detailed Method Only)

• Provide details of each property:

  • Description of Property: Include the type and address of the property.

  • Country Code: Enter the country where the property is located.

  • Maximum Cost Amount During the Year: Record the highest cost amount of the property during the year.

  • Cost Amount at Year-End: Record the cost amount at the end of the year.

  • Income (Loss): Report any income or loss generated from the property.

  • Gain (Loss) on Disposition: If you disposed of the property, report the gain or loss realized.

Step 8: Complete Part C – Summary of Foreign Income

• Total Income (Loss): Summarize the total income or loss from all foreign properties.

• Total Gain (Loss) on Disposition: Summarize the total gain or loss on the disposition of foreign properties.

Step 9: Sign and Date the Form

• Signature: Sign the form to certify that the information provided is accurate.

• Date: Enter the date of completion.

Step 10: Submit the Form

• Attach the completed Form T1135 to your income tax return.

• Alternatively, if filing electronically, ensure that Form T1135 is filed by the same deadline as your tax return.

Step 11: Retain a Copy for Your Records

• Keep a copy of the completed form and all supporting documents for your records.

  
  

Important Notes:

• Ensure that you comply with the filing deadlines to avoid penalties.

• If you need assistance, consider consulting a tax professional to ensure accuracy and compliance.