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CRA Examination of Canadians Owning US Real Estate

CRA Examination of Canadians Owning US Real Estate

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CRA Launches Massive Examination of Canadians Owning US Real Estate

Source: Levy Salis
Author: Shlomi Steve Levy and Sergei Titorenko
Date: July 23, 2020

Scope of the Examination

As part of this examination, the CRA has announced that it is seeking a provider to compile information on US real estate data on transactions to which Canadians were parties, whether as buyers, sellers or transferors of some other sort. This information compilation process will allow the CRA to gather information on US real estate transactions involving Canadian residents and cross reference these transactions with the tax returns of the same residents to ascertain if they are in compliance with their Canadian tax filing obligations.

Ownership of US Investment Property

Canadian residents are required to disclose ownership of US real estate and other specified foreign investment with a value of over $100,000 CAD. Specified foreign property includes foreign investment real estate, foreign bank and investments, and interests in foreign businesses. The disclosure of this property is made by filing Form T1135, Foreign Income Verification Statement. Failure to file Form T1135 where required triggers a filing penalty per slip of $25 CAD/day for each day late up to a 100-day maximum for a total penalty of $2,500 CAD per slip, plus interest in arrears.

Click here to read the full article.

Note from NCCA
The article states that Canadian residents are required to disclose ownership of US real estate and other specified foreign investment with a value of over $100,000 CAD, however, per CRA this should be foreign investment with a cost of over $100,000 CAD. 

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/foreign-income-verification-statement.html