T1135 - Gain on Disposal of Asset

Tax Topics
1

I have a client who had a property being reported in T1135 in past and that property was sold in 2025 creating a taxable capital gain but I could not trace this gain in T1 tax return.

I was wondering if I can get some guidance on how does the gain transferred for the personal tax return.

2

A taxpayer who owns specified foreign property is legally required to file two tax forms/returns by due date.

  1. T1
  2. T1135
    Generally taxpayers who own specified foreign property need the assistance of professionally qualified tax accountants with good working knowledge of the Income Tax Act to assist with both tax “returns”, as penalties can be very large.
    Failing to report Capital Dispositions properly on either would also give the taxpayer substantial trouble with CRA.
3

Not sure what you mean. If the property sold was some kind of investment with a Canadian broker or portfolio manger, the broker should issue a T5008. When you enter the T5008 slip in TaxCycle, the details are “transferred” to the S3. But if the property is a house or something, there is no T slip - you must enter the details on S3 yourself. In any case, you must also enter the details on the T1135.

4

Thanks Nezzer.

I think I figured that out. I was of the opinion that T1135 is linked to T1 but apparently I will have to update S3 for the gain on disposal of property in T1135. Thanks

5

related question: I have a deceased client/GRE for whom the brokerage has issued T1135 information for the account (as of when it was distributed to the beneficiaries mid-year) plus T3 and T5 slips covering that period, but there is NO corresponding T5008 information for the approx. 1M in gains that need to be reported. How is that possible? They did issue T5008’s for odd partial shares disposed when the account was ultimately closed later in the year?!

The broker in question is Scotia iTRADE (who are also not making available any deemed or realized gains info for the executors). Anyone have any tips on how to find these reports on the platform? The executor is retired and motivated so they’re working on assembling the info but…