T1135 and foreign-asset reporting for Canadians with U.S. stock

If you are a Canadian resident holding U.S. stocks, RSUs sold into cash, or other foreign assets, there is a good chance you have heard some version of:

“You might need to file T1135.”

That sentence is vague enough to create anxiety and vague enough to be misapplied.

What T1135 is really about

T1135 is an information return, not a separate tax.

Its purpose is to report certain specified foreign property once the total cost amount crosses the reporting threshold. For many technical professionals, the issue shows up because of:

U.S. shares in a non-registered account
company stock held outside registered plans
foreign cash balances
foreign ETFs or brokerage holdings

Why people get confused

The confusion usually comes from mixing together three different questions:

Is this foreign property?
Is it in an account that counts for T1135 purposes?
Has the total cost amount crossed the filing threshold?

That is why “I only own U.S. stocks” is not enough information by itself.

The practical rule

If you are a Canadian resident and hold meaningful foreign assets in non-registered accounts, do not guess. Review the T1135 rules before filing season.

CRA’s official entry point is here: Form T1135.

Where technical professionals commonly trip up

RSUs can create a reporting problem later

The vest itself is one issue. What happens after vest is another.

If shares or proceeds remain in a non-registered account, foreign-property reporting may become relevant even if the original compensation event was handled correctly for payroll and tax.

Registered vs non-registered matters

Not every account is treated the same way for reporting purposes. People often assume “my broker knows” and move on. Sometimes that is fine. Sometimes it is not.

The threshold can be crossed gradually

No single transaction may feel large. Then a few years of U.S. stock purchases, vests, and reinvestment quietly push the household over the line.

Planning moves that help

track foreign holdings separately in your records
know which accounts are registered and which are not
avoid letting employer stock accumulate by accident
review foreign holdings before each tax season, not after

Checklist

Identify every non-registered account with foreign holdings.
Track employer stock separately from broad-market investing.
Check whether the household is approaching the T1135 threshold.
Keep records that make tax-time reporting easy.
Do not assume foreign reporting is “handled automatically.”