T1135 for Crypto: Canadian Foreign Property Reporting for Digital Assets

Most Canadian crypto holders know they need to report capital gains. Far fewer know about the T1135 — Foreign Income Verification Statement, a separate filing requirement that can apply even if you owe zero tax on your crypto activity.

If you have ever held more than CAD $100,000 in crypto on a foreign exchange, you may need to file this form. And the penalties for not filing are steep.

What Is the T1135?

The T1135 is an information return filed with the Canada Revenue Agency (CRA) by Canadian residents who hold specified foreign property with a total cost exceeding CAD $100,000 at any point during the tax year.

It is not a tax form in the traditional sense — it does not calculate any tax owing. It is a disclosure form that tells the CRA what foreign assets you hold, where they are held, and their cost and income.

Does Crypto Count as Specified Foreign Property?

Yes — when held on a foreign exchange. The CRA considers crypto held on a non-Canadian exchange to be specified foreign property because it is a financial account held at a foreign institution.

The distinction matters:

• Crypto on foreign exchanges (Binance, Coinbase, Kraken, KuCoin, OKX, Bybit, etc.) — Yes, this is specified foreign property. Note: Coinbase and Kraken, while US-headquartered, are foreign to Canadian residents.
• Crypto on Canadian exchanges (Shakepay, Newton, Bitbuy, NDAX, Coinsquare) — No, these are domestic institutions and do not count toward the T1135 threshold.
• Crypto in self-custody wallets (hardware wallets, MetaMask, etc.) — The CRA’s position is less clear. The prevailing view among Canadian tax professionals is that self-custodied crypto is not specified foreign property because there is no foreign institution holding it. However, some advisors recommend reporting it conservatively. Consult your tax professional.
• DeFi protocols — Crypto deposited in DeFi smart contracts (lending, staking, liquidity pools) on foreign blockchains is a gray area. If you interact through a foreign platform or institution, it may qualify.

The $100,000 Threshold

The threshold is based on the total cost (ACB) of all specified foreign property — not market value. This is a critical distinction:

• If you deposited CAD $120,000 onto Binance and your portfolio dropped to CAD $60,000, you still need to file because the cost exceeded $100,000.
• The threshold is aggregate across all foreign property, not just crypto. If you have $70,000 in crypto on Coinbase and $40,000 in a US brokerage account, you are over the threshold.
• The $100,000 test is applied at any point during the year, not just year-end.

Two Reporting Methods

The T1135 has two reporting options:

Simplified Method (cost under $250,000)

If the total cost of all your specified foreign property is under CAD $250,000 throughout the year, you can use the simplified method. You check boxes for the types of property held and report the top three countries where the property is located. No detailed breakdown by institution is required.

Detailed Method (cost $250,000 or more)

If the total cost reaches $250,000 at any point, you must provide detailed information for each foreign property, including:

• The name of the institution or entity
• The country where the property is held
• The maximum cost during the year
• The cost at year-end
• Income earned from the property
• Gain or loss on disposal

Filing Deadlines

• Employees — April 30 (same as your personal tax return).
• Self-employed individuals — June 15, but any balance owing is still due April 30.
• The T1135 is filed separately from your tax return but with the same deadline.

Penalties for Non-Filing

The CRA takes T1135 compliance seriously:

• Late filing — $25 per day, minimum $100, maximum $2,500 per year.
• Failure to file — $500 penalty for the first year, plus $25/day up to $2,500.
• Gross negligence — 5% of the cost of the unreported foreign property. If you have $200,000 on foreign exchanges and do not file, this is a $10,000 penalty.
• Extended reassessment period — If you fail to file the T1135, the CRA can reassess your tax return for that year indefinitely — there is no statute of limitations. Normally, the CRA has 3-4 years to reassess.
• False statements or omissions — Additional penalties under section 163(2) of the Income Tax Act.

The extended reassessment period is the most dangerous consequence. Even if the CRA does not catch the non-filing immediately, they can come back 10 or 15 years later and reassess everything.

Quebec: TP-1079

If you are a Quebec resident, you have a parallel provincial requirement. The TP-1079 (Foreign Income Verification Statement) is Quebec’s equivalent of the T1135, filed with Revenu Québec.

• The threshold and rules mirror the federal T1135.
• You must file both the T1135 (federal) and TP-1079 (provincial) if you meet the criteria.
• Quebec has its own penalty structure for non-filing.
• The filing deadline aligns with your Quebec provincial tax return deadline.

Common Mistakes

• Thinking only traditional investments count — Crypto on foreign exchanges is specified foreign property. Period.
• Using market value instead of cost — The $100,000 threshold is based on cost (ACB), not current market value. A crash does not get you off the hook.
• Forgetting about closed accounts — If you held $150,000 on Binance in February and withdrew everything in March, you still need to file because you exceeded the threshold during the year.
• Not filing because you had a loss — The T1135 is an information return. It does not matter whether you made money or lost money. If the cost threshold was met, you file.
• Ignoring Quebec requirements — Quebec residents must file both T1135 and TP-1079. Missing the provincial form is a separate violation.

How BlockchainSmartTax Helps

BlockchainSmartTax automates T1135 and TP-1079 compliance for Canadian crypto holders:

• Foreign exchange identification — We automatically identify which of your connected exchanges are foreign (non-Canadian) institutions.
• Cost tracking in CAD — All balances are converted to Canadian dollars using Bank of Canada exchange rates, with maximum cost during the year calculated automatically.
• Threshold monitoring — We calculate your aggregate foreign property cost throughout the year and alert you if you cross the $100,000 or $250,000 thresholds.
• T1135 data export — Generate the institution-by-institution breakdown needed for the detailed T1135, including maximum cost, year-end cost, income earned, and gains/losses.
• Quebec TP-1079 support — Quebec residents can generate the equivalent provincial report alongside the federal T1135.
• ACB calculation — Your Adjusted Cost Base is calculated using the CRA-required pooled method, ensuring the cost figures on your T1135 match your capital gains calculations.

If you are a Canadian crypto investor using foreign exchanges, you likely need to file the T1135. Create your free account and find out in minutes whether you meet the threshold.