The Canada Revenue Agency (CRA) is actively expanding its automated data-matching programs with foreign financial institutions this fall. With this increased visibility, the penalty for failing to file Form T1135—officially known as the Foreign Income Verification Statement—remains one of the CRA’s most aggressive audit targets.
For Alberta business owners and investors, the penalty for late or missing T1135 filings is harsh: $25 per day, up to a maximum of $2,500 per year. If you hold "specified foreign property" with a total cost base exceeding $100,000 CAD at any point in the year, you are legally required to file this form.
Unfortunately, many taxpayers unknowingly meet this threshold. Here are the most common reporting oversights that can trigger costly penalties:
1. U.S.-Listed Stocks in Canadian Non-Registered Accounts
- A frequent misconception is that holding investments through a Canadian brokerage automatically exempts you from foreign reporting. This is incorrect.
- If you own shares in foreign corporations (such as U.S.-listed tech or dividend stocks) in a non-registered Canadian account, and the combined cost base of all your foreign property exceeds $100,000 CAD, it must be reported.
- Note that this applies only to non-registered accounts; investments safely tucked inside an RRSP, TFSA, or FHSA are exempt.
2. Foreign Rental Property
- Owning a vacation home outside of Canada for strictly personal use does not require a T1135. However, if you rent out that property with a reasonable expectation of profit—even for only part of the year—it is reclassified as an income-earning asset.
- Whether it’s a condo in Florida or a short-term rental property in Mexico, if its cost exceeds the $100,000 CAD threshold alongside your other foreign properties, you must report it to the CRA.
3. International Digital Assets
- As digital currencies become mainstream, they are firmly on the CRA’s radar in 2026. Cryptocurrency and other digital assets situated outside of Canada (such as those held on a foreign-based exchange) are considered specified foreign property.
- If the total cost base of your crypto portfolio, combined with other foreign assets, crosses the $100,000 CAD threshold, it triggers a mandatory filing requirement.
The Bottom Line
With automated global data-sharing at an all-time high, relying on the CRA "not finding out" is a high-risk gamble. Proactive reporting is the only way to protect yourself and your business from compounding daily penalties.
This blog was written by Jody Neves.
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