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Written by: Dario Bon, CPA, CA
On December 4, 2015 the Canada Revenue Agency (CRA) held true on a promise from the 2015 Federal Budget by releasing a new version of Form T1135 Foreign Income Verification Statement.
The revised form T1135 includes a section allowing for a simpler reporting method for specified foreign property if the total cost to the taxpayer at any point during the year was in excess of $100,000 but no more than $250,000.
Any taxpayer with specified foreign property costing $250,000 or more at any point during the year, must continue to use the detailed reporting method in the old CRA form T1135.
If a taxpayer qualifies for the new simplified reporting method they have the option to either report their specified foreign property and related gross earnings using the new method, or to continue to use the more detailed reporting method (the old form T1135) that was previously in place; there is no requirement to report using the new revised form T1135.
The new CRA tax form T1135 reporting method allows qualifying taxpayers to simply check off a box for the category of foreign property held during the year, rather than providing the specifics of each property.
Additional reporting fields in the new section of CRA form T1135 include:
The CRA has released additional form T1135 Questions & Answers that include guidelines for identifying the top three country codes. Find out more on the CRA guidelines here.
The new form T1135 must be used for taxation years including and subsequent to 2015. The CRA has also stated that it will allow taxpayers to submit revised T1135 forms for prior years (using the new form and method) where the cost threshold requirements are satisfied.
While it seems that the new simplified reporting requirements will be much less onerous, detailed analyses will still be required in order to identify the appropriate boxes to be checked off.
If you have more CRA T1135 tax form questions, please contact Dario Bon of the Manning Elliott tax team at 604-714-3600 for assistance in navigating this, and other complex tax issues.