Can I Avoid Penalties on T1135 Late Filing

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Welcome to Maroof HS CPA
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Can I Avoid Penalties on T1135 Late Filing?
Worried about filing your income tax returns? Did
you forget to consider your foreign rental
income? Now you are worried about the
penalties. What if we tell you that there is a
way around it? So, can you really avoid penalties
on T1135 late filing? Read on to learn more.
What is the T1135 Form?
The CRA, short for the Canada Revenue Agency uses
the T1135 form to obtain information on the
number and income generated through foreign
assets that are held by the residents of Canada.
Form T1135 is also known as Foreign Income
Verification Statement.
Who should Fill it?
You must file the T1135 form, also known as the
Foreign Income Verification Statement if you own
foreign property worth more than 100,000 Canadian
Dollars at any time during the year. This is
applicable to all individuals, trusts, and
partnerships.
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When completing the foreign income verification
statement, you must consider the property's cost
rather than its current value. An individual
need not complete the T1135 form if they
purchased the land for less than 100,000 Canadian
Dollars and its current value exceeds 100,000
Canadian Dollars. You are also exempt from
declaring mutual funds registered in Canada that
invest in foreign stocks and personal property.
You can also exclude vacation property that you
use primarily as a personal residence. Funds in
your pension plan, income, or property that you
use exclusively related to your active business
can also be omitted.
What is the Penalty for T1135 Late Filling?
Failure to submit the foreign income verification
statement on time may result in a penalty of 25
per day. This fine can go up to as much as 2,500
per year.
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How can I Avoid Penalties on T1135 Late Filing?
A Canadian taxpayer can apply to lighten the late
filing penalties through CRAs Voluntary
Disclosure Program (VDP). This is applicable to
the ten prior taxation years. The CRA's VDP
provides taxpayers with a second chance to
correct unintentional errors or omissions in
their income tax returns. One might get relief
from the penalties for the late filing of the
T1135 form through VDP. But keep in mind that
they are still required to pay any taxes and
interest owing. Not that the Voluntary
Disclosure Program applications filed by those
who have purposefully avoided their tax
obligations will not be granted the same relief
as those who want to correct an unintentional
error. Hope all your question on T1135 Late
filing penalties were answered through this
article. If you have any further queries let us
know in the comments. More information contact
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