T1135, explained for people with U.S. stock

If you hold U.S. stocks or vested RSUs in a regular brokerage account, you’ve probably heard a vague warning: “you might need to file T1135.” It’s just specific enough to cause anxiety and just vague enough to be ignored. Here’s the actual rule.

What T1135 is — and isn’t

T1135 is an information return, not a tax. Filing it costs you nothing in tax; it just tells the CRA what foreign property you hold. The penalties are for not filing, not for the holdings themselves.

The one number that triggers it

The $100,000 cost threshold

You must file T1135 if the total cost (not market value) of your specified foreign property exceeds CAD $100,000 at any point during the year — even for a single day. It’s based on adjusted cost base in CAD, so a position that cost you $95k but is now worth $180k does not trigger it on its own.

What counts, and what doesn’t

Counts toward the threshold	Does not count
U.S. and other foreign stocks in a non-registered account	Anything in your RRSP, TFSA, RESP, or FHSA
Vested RSU shares held outside registered accounts	U.S. stocks held inside registered accounts
Foreign cash and brokerage balances	Personal-use property (e.g., a U.S. vacation home you use)
Foreign ETFs / bonds held directly	Property used in an active business

The single most important line in that table: registered accounts are exempt. U.S. stock in your TFSA or RRSP never counts toward T1135.

Two reporting methods

• Simplified method — cost between $100,000 and $250,000. You tick the asset categories and total income; no per-holding detail.
• Detailed method — cost above $250,000. You report each property, country, cost, income, and gain.

CRA’s entry point: Form T1135.

Where technical professionals get caught

RSUs create the problem after the vest

The vest itself is handled on your T4. But the shares you keep afterward, in a non-registered account, are foreign property. Plenty of people handle the income side perfectly and never realize their growing pile of company stock has quietly become a T1135 item.

The threshold creeps up on you

No single purchase feels large. Then a few years of ESPP buys, RSU vests, and dividend reinvestment push your cost base past $100k without any obvious moment where it “happened.” Check cost, not the comforting fact that no one transaction was big.

”My broker handles it”

Your broker reports income; it does not file your T1135. That’s on you.

The penalties

Don’t skip it

The basic late-filing penalty is $25/day, minimum $100, up to $2,500 per year — and far higher where the CRA alleges gross negligence or applies it across multiple years. For a form that often takes 20 minutes, that’s a terrible trade.

Checklist

• Add up the cost (in CAD) of foreign holdings in non-registered accounts.
• Ignore anything inside your RRSP / TFSA / RESP / FHSA.
• Track vested employer shares separately — they’re the usual culprit.
• File if cost crossed $100k at any point in the year (simplified ≤ $250k).
• Don’t assume your broker files it — they don’t.

Related: RSUs, explained properly and Tax-loss selling.