Form T1135 and the $100,000 Foreign Property Threshold
Form T1135, the Foreign Income Verification Statement, turns on a number most investors think they already understand. The $100,000 threshold that decides whether you have to file is not a test of what your foreign holdings are worth. It is a test of what you paid for them, in Canadian dollars, translated at the rate on the day you bought. Nearly everything confusing about this form follows from that one distinction.
Three consequences run through everything below: a bigger portfolio can owe nothing while a smaller one owes a form, two buyers of the identical position can land on opposite sides of the line, and the account matters more than the shares.
The rule, in the Act’s own words
The obligation comes from section 233.3 of the Income Tax Act, which makes you a reporting entity where, “at any time (other than a time when the entity is non-resident) in the year or period, the total of all amounts each of which is the cost amount to the entity of a specified foreign property of the entity exceeds $100,000.”
The CRA’s Form T1135 puts it plainly at the top of page one: “Complete and file this form if at any time in the year the total cost amount to the reporting taxpayer of all specified foreign property was more than $100,000 (Canadian).”
Three phrases do the work. “Cost amount”, not value. “At any time in the year”, not December 31. And “(Canadian)”, which means a US-dollar purchase has to be translated before you can test it.
Cost, not value, so the bigger portfolio can be the one that files
The CRA addresses the value question head on in its published answers about Form T1135. Asked whether the threshold is based on fair market value: “No, it is based on the cost amount. The cost amount is defined in subsection 248(1) of the Income Tax Act and generally is the adjusted cost base and not the fair market value.”
That inverts the intuition. Two illustrative cases, round figures rather than data, to show the mechanics:
| Investor | Cost amount | Market value | Files a T1135? |
|---|---|---|---|
| Long-held winner | C$60,000 | C$240,000 | No |
| Recent buyer, sitting on a loss | C$105,000 | C$80,000 | Yes |
The larger portfolio has no filing obligation and the smaller one does. Because the test runs on adjusted cost base, you cannot apply it without knowing what your ACB is, which is worth settling before tax season: our guide to the adjusted cost base covers how it is built and what adjusts it.
Timing matters as much. A taxpayer whose cost amount passed $100,000 during the year but sat below it at year end still files: “As long as you met the reporting requirement threshold of $100,000 at any time in the year, you must report on Form T1135 all specified foreign properties held during the year.” Selling down before December does not undo it.
The rate on your purchase date decides which side of the line you land on
The form’s instructions set the translation rule: “The amounts to be reported on Form T1135 should be determined in the foreign currency then translated into Canadian dollars. Generally, when converting amounts from a foreign currency into Canadian dollars, use the exchange rate in effect at the time of the transaction (i.e. the time the income was received or the property was purchased).”
So the threshold is not a fixed quantity of US stock. It is a fixed quantity of Canadian dollars, and the rate that converts one into the other is whatever it was on your purchase date. In the Bank of Canada’s daily average USD/CAD series, 1,925 observations since January 2, 2019, that rate ran from a low of 1.2040 on June 1, 2021 to a high of 1.4603 on February 3, 2025, a spread of 0.2563 or 21.29%. The most recent reading, data as of September 18, 2026, is 1.4002.
That moves how much US-dollar cost it takes to reach C$100,000:
| USD/CAD daily average | Date | US-dollar cost reaching C$100,000 |
|---|---|---|
| 1.2040 (series low) | June 1, 2021 | US$83,056 |
| 1.4002 (most recent) | September 18, 2026 | US$71,418 |
| 1.4603 (series high) | February 3, 2025 | US$68,479 |
Run it the other way, with two investors who bought the identical position on different days:
| Purchase date | USD/CAD daily average | Cost amount of a US$78,000 buy | Files a T1135? |
|---|---|---|---|
| June 1, 2021 | 1.2040 | C$93,912.00 | No |
| February 3, 2025 | 1.4603 | C$113,903.40 | Yes |
Same shares, same US dollars, a gap of C$19,991.40 in cost amount, opposite answers. Across the full series, a US$78,000 purchase would have crossed C$100,000 on 1,578 of the 1,925 days, or 82.0% of them. A rough conversion at today’s rate will not do. The same translate-at-the-transaction-date rule governs the other side of the trade, which we covered in our piece on the exchange rate and capital gains on US stocks.
The account matters more than the holding
Identical shares can trigger the form in one account and nothing in another. The CRA’s published answer names two: “Specified foreign property held in an RRSP or a TFSA is excluded from Form T1135 reporting requirements.” The Act reaches wider. Section 233.3 excludes from “specified Canadian entity” a trust described in paragraphs (a) to (e.1) of the definition of trust in subsection 108(1), and that paragraph puts the RRIF, RESP, FHSA, RDSP and registered pension plan trusts alongside the RRSP and the TFSA. In practice it is the non-registered margin or cash account that puts you in scope.
What counts, including the trap that runs backwards
Holding through a Canadian broker exempts nothing. Asked whether shares of non-resident corporations held through a broker, Canadian or foreign, are specified foreign property, the CRA answers: “Yes. Shares of non-resident corporations are specified foreign property and should be reported, regardless of whether the shares are held through a broker.”
The form’s list also runs in a direction people do not expect. Alongside shares of a non-resident corporation held by a taxpayer or an agent, it names “shares of corporations resident in Canada held by you or for you outside Canada”. A Canadian stock sitting in a US brokerage account is specified foreign property. Where it is held is the test, not where it is listed.
The rest of the list covers funds held outside Canada, tangible property abroad, debt owed by a non-resident including bonds and notes receivable, foreign insurance policies, precious metals and futures held outside Canada, and interests in non-resident trusts acquired for consideration. Property used exclusively in an active business, foreign affiliate shares and debt, and personal-use property under section 54 are excluded.
Funds split along the same line. The CRA states that “the investor does not have to report their investment in a Canadian mutual fund trust because it is not a specified foreign property.” A Canadian-listed fund holding US stocks is generally out. Units of a US-listed fund are caught by 233.3(1)(c), (d) or (f) depending on how the fund is constituted, which its own ETF Facts document sets out. If that structural difference is steering your choice, our roundup of Canadian-listed ETFs is a place to start.
Part A, Part B, and the aggregate most people miss
The form sets its own split: where total cost at any time in the year “exceeds $100,000 but was less than $250,000, you are required to complete either Part A or Part B”, and where it “was $250,000 or more, you are required to complete Part B.”
Part A is the simplified method, which in the CRA’s words “allows taxpayers to tick the box for each type of property they held during the year, rather than providing details for each property.” There are seven boxes, plus the top three country codes by maximum cost amount, gross income, and gain or loss on disposition.
The seventh box saves ordinary brokerage investors the most work: “Property held in an account with a Canadian registered securities dealer or a Canadian trust company.” The instructions let a holder of such property “report the aggregate amount of all such property in this category”, “aggregated on a country-by-country basis”, and it “is also acceptable to provide aggregate totals for each particular account”. No position-by-position list.
Note the switch, because it catches people. The $100,000 test is on cost, but Category 7 reports value: dealer or trust company name, country code, maximum fair market value during the year, fair market value at year end, gross income, and gain or loss on disposition. The instructions allow “the maximum month-end fair market value” as that maximum.
Deadline and penalties
The form “must be filed on or before the due date of your income tax return … even if the income tax return (or partnership information return) is not required to be filed”, which section 233.3(3)(b) puts as the filing-due date for the year. It can be filed electronically.
Missing it is expensive relative to the effort. Under section 162 of the Act, subsection 162(7) sets a penalty equal to “the greater of $100 and the product obtained when $25 is multiplied by the number of days, not exceeding 100, during which the failure continues.” That is C$100.00 on day one, C$750.00 at 30 days, and C$2,500.00 at 100 days, where it caps.
Subsection 162(10) goes further where a taxpayer “knowingly or under circumstances amounting to gross negligence” fails to file. Its formula, ($500 x A x B) minus the 162(7) penalty already charged, reaches a further C$9,500.00 over 24 months, C$12,000.00 in all, and doubles to C$21,500.00 more, C$24,000.00 in all, where the taxpayer failed to comply with a demand under section 233.
A false statement or omission in a 233.3 return carries its own penalty under section 163. Paragraph 163(2.4)(c) sets it at “the greater of (i) $24,000, and (ii) 5% of the greatest of all amounts each of which is the total of the cost amounts … of a specified foreign property”. The 5% branch overtakes the flat $24,000 at a cost amount of C$480,000, and at C$1,000,000 it works out to C$50,000.
One caveat before you apply any of this
This is general information about how the threshold and the form work, not tax advice, and it is no substitute for an accountant who has seen your actual accounts and purchase history.
What the form is not
The T1135 reports. It does not tax. Income and gains from foreign property are reported and taxed on your return itself, in the usual places, not on this form. Filing it creates no tax bill and skipping it defers none. It is a disclosure form with a penalty attached, which is exactly why the arithmetic that decides whether you owe one is worth doing carefully, and in the right currency.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Income Tax Act sections 233.3, 162, 163 and 108(1) from Justice Laws, fetched September 21, 2026. CRA Form T1135 E (23), the form and its instructions, six pages, fetched September 21, 2026. CRA ‘Questions and answers about Form T1135’, fetched September 21, 2026. Bank of Canada Valet series FXUSDCAD, daily average USD/CAD, 1,925 observations from January 2, 2019 to September 18, 2026. All exchange-rate and penalty arithmetic is ours, computed from those sources.
