T1135 & departure on December 31st

simplelife · Post by **simplelife** » Sat Dec 19, 2015 2:08 am

My wife, unemployed, is a USC and returned to the US in August.

I am going to enter the US, activate GC on January 1st (so departure date on final CRA return is December 31st)

I have now sold everything I own (house, car etc)

During 2015, we transferred about $110k USD into wife's US account.

1) I believe my wife needs to file T1135 Part A or B. The $110k is in a non-interest earning checking account. Am I correct and that means for "Income from all specified foreign property" answer is [b]zero[/b]

2) What about "Gain(loss) from the disposition from all specified foreign property"? is this also zero?

3) On December 30th or 31st, I will be wiring $250k+ into a US bank.

According to the T1135, this means I have to file the form with Part B? Even if the funds will be in the US only on my last day of Canadian residency?

Thanks in advance nelson :)

nelsona · Post by **nelsona** » Sun Dec 20, 2015 10:35 am

Sounds good.

Don't forget SHE has an earlier departure date than you. And she might have non-resident filings because of this (ie. the dale of your home was done while she was non-resident), and her deemed dispositions of other items would be from that date.

simplelife · Post by **simplelife** » Sun Dec 20, 2015 10:02 pm

She didn't work in 2015 in neither in US nor in Canada, so she won't be filing taxes on either side of the border, so I suppose her departure date won't matter?

We sold our house in the beginning of the year. Also I transferred $110k USD into her US account at the beginning of the year. So there is no deemed disposition at play, right? Just a T1135 Part A with zero income and zero gain?

nelsona · Post by **nelsona** » Mon Dec 21, 2015 9:14 am

It would be wise for her to file a departure tax return. Do neither of you have any investments at all? These are deemed sold on departure, as well assets (both foreign and Cdn) need to be listed on the departure return.

Filing a departure return makes sure that both she/you and CRA know that you have taken care of any departure requirements.

Technically when you sell your principal residence, you also want to notify CRA of the sale, and formally take the principal residence exemption.

simplelife · Post by **simplelife** » Tue Dec 22, 2015 4:35 pm

Neither of us have any investments. Only cash mentioned above.

Oh so on my final return I have to disclose my cash savings?!

nelsona · Post by **nelsona** » Tue Dec 22, 2015 8:53 pm

Look over the emigrant requirements on CRA website. Your house was an investment.

simplelife · Post by **simplelife** » Wed Dec 23, 2015 12:55 am

I have reviewed. We sold our house (and closed the sale) a few months prior to my wife moving to the US. It was the only house we owned and our only principal residence which we owned for 4.5 years.

At the time of my wife's departure (september 1st) and my departure (December 31st) the only asset we held is cash (USD and CAD).

So, if at the time of departure, we own only owned cash, there is nothing to deem sold. Thus nothing to put on T1243

It seems the two main forms that get attached to the final departure tax return T1 are the deemed disposition form (T1243) and T1135.

Am I overlooking something?

nelsona · Post by **nelsona** » Wed Dec 23, 2015 7:10 am

T1135 is not particularly "interested" in emigrants. It only covers the period before emigration, thus it is no more or less important than for any other category of taxpayer.

T1161 would be more important in your case, since it also includes personal property like your car(s) and has a non-filing penalty.

Just wanted to make sure that you had not lost focus on the entire emigrant process. since there is an obsession with T1135 these days.

All the best