As a Canadian resident, you have to report the income you’ve earned from both Canadian and foreign sources. This includes reporting any specified foreign property you held in 2017 that’s worth over $100,000 CAD on the T1135: Foreign Income Verification Statement form.
What’s considered specified foreign property?
According to the Canada Revenue Agency (CRA), specified foreign property includes:
- Bank accounts held abroad (interest income)
- Debt securities and shares of foreign corporations (mutual funds, shares, bonds, or debentures) and debt owed by a non-resident, including governments
- Real estate
- An interest in a partnership that holds a specified foreign property unless the partnership is required to file a T1135
- A life insurance policy issued by a foreign issuer
- Other tangible and intangible (like patents or copyrights) properties located outside Canada
Specified foreign property does not include:
- Property used or held exclusively in the course of carrying on an active business
- Registered pension fund investments
- Foreign investments held in Canadian registered mutual funds
- Personal-use properties (cottages, paintings, jewelry, automobiles)
- Shares of a foreign affiliate
Where do I report this?
Follow these steps in H&R Block’s 2017 tax software to complete the T1135:
- On the PREPARE tab, click the REQUIRED icon.
- Navigate to the Special situations page. You’ll find yourself here:
- Answer Yes to the question, At any time in 2017, did you own or hold specified foreign property with a total cost of more than $100,000 CAD?.
- When you arrive at the Foreign income verification statement page, enter your information into the tax software.