Most Canadian crypto trouble is about unreported gains. This page is about a form that can go wrong with zero tax owing. The T1135 Foreign Income Verification Statement is required when the total cost of specified foreign property exceeds $100,000 CAD at any point in the year. Whether a particular crypto holding on a foreign platform is specified foreign property turns on the legal situs and custody facts; HolderTax is treating that crypto-specific application as contested until licensed review.
First question: does the holding qualify as specified foreign property?
The CAD 100,000 threshold does not answer the crypto situs question. CRA T1135 guidance defines the reporting regime for specified foreign property, but HolderTax has not located a universal primary CRA rule that makes every foreign-platform or self-custodied crypto holding identical for situs. Platform entity, custody rights and the legal character/location of the property can matter. Treat the crypto-specific classification as a review question before applying the threshold.
The threshold people misread
Three misreadings account for most missed filings. The threshold is cost, not value — what you paid, not what it is worth in a drawdown. It is total across all specified foreign property — foreign brokerage accounts and foreign crypto add together. And it is at any time in the year — crossing $100,000 for one week in March creates the obligation for the whole year, even if you sold everything by April. A holder who bought $120,000 of coins on an offshore platform, watched them fall, and owes no tax anywhere can still owe this form.
The T1135 is how a year with no gains, no income and no tax can still produce a penalty letter — per year, per form, plus interest.
The threshold only matters after the property is in T1135 scope
| Question | If yes | If no / unresolved |
|---|---|---|
| Is the holding specified foreign property? | Include its cost when testing the threshold. | Do not force the crypto holding into the form solely because the platform brand is foreign; document the classification analysis. |
| Did total specified foreign property exceed CAD 100,000 cost at any time? | T1135 filing obligation can arise. | Threshold not crossed. |
| Was total cost always below CAD 250,000 after crossing CAD 100,000? | Part A simplified reporting is available; Part B may also be chosen. | If CAD 250,000 or more was held at any time, detailed Part B applies. |
| Was the form filed late? | Basic subsection 162(7) penalty can be CAD 25/day, min CAD 100, max CAD 2,500; other penalties can apply. | Keep filing proof and classification/cost records. |
Market value can fall while the filing obligation remains
Assume, only for this example, that the relevant holdings are specified foreign property. If their combined cost reaches CAD 120,000 in March and later falls to CAD 70,000 market value, the cost threshold was still crossed. If cost remained below CAD 250,000 throughout the year, Part A is available; if it reached CAD 250,000 or more at any time, Part B is required.
Four facts are material before filing
- The legal classification and situs of the particular crypto holding.
- Total cost amount across all specified foreign property, not just crypto and not market value.
- Whether CAD 250,000 was reached at any time, which changes Part A/Part B reporting.
- Whether CRA contact has already changed the availability or relief level of a voluntary disclosure route.
What failure costs
The basic late-filing penalty runs $25 per day to a ceiling of $2,500 per form, per year — and a multi-year miss multiplies it. Gross-negligence versions run far higher, and an unfiled T1135 can also extend how far back the CRA may reassess the related years. The exposure is bureaucratic rather than dramatic, which is exactly why it compounds: nothing hurts until the letter arrives with several years attached.
What to do, by situation
- Specified foreign property never exceeded $100,000 total cost: the T1135 threshold is not crossed. Keep the records that support both classification and cost.
- Over the line this year, filings current otherwise: file the T1135 with the return, by the same deadline. The form asks for cost ranges, income and gains per category — data your reconstruction already contains.
- Missed years behind you: the post-2025 VDP may be relevant. Eligibility and relief depend on the current program rules, whether the application is prompted or unprompted, and the facts behind any omitted income as well as the information return.
- Heavy offshore-platform usage ongoing: decide the situs positions once, with an adviser, and apply them consistently — flip-flopping between "foreign" and "not foreign" year to year is its own red flag.
Why the line stays "watch"
The self-custody situs question is unresolved, platform corporate structures move (the entity behind your login matters), and CARF-era data will make foreign-platform usage visible to the CRA in a way the T1135's drafters never had. We publish the mechanics, mark the open questions, and — as on every page — the positions await a licensed reviewer's signature.
Situs and filing positions depend on facts this page does not have. It frames the question; it does not answer it for you, and reading it creates no professional relationship.