Indebtedness on T1135 - cost

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groobi
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Joined: Thu Jun 23, 2016 9:32 pm

Indebtedness on T1135 - cost

Post by groobi »

Hello I lent over $100,000 cad (in USD) to a non-resident. Is the cost the USD amount multiplied by the exchange rate on the day I lent the money? How about the cost amount at year end?? Thank you!
nelsona
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Post by nelsona »

You report the highest value in CAD , whatever that time in the year it occurred.
Find the peak exchange rate and use that.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
SM
Posts: 94
Joined: Fri Mar 20, 2015 3:43 pm

Post by SM »

Is the amount over $250K?

If the amount is over $100K but less than $250K, based on the new rules, my understanding is you do not need to report either the maximum cost amount or year-end cost amount. You would be able to use the Simplified Method and only need to report 1) the country it's from 2) the income you received (if applicable) and 3) the gain/loss on disposition (if applicable)

If it's more than $250K, you would need to use the Detailed Method and report 1) the country it's from 2) the income you received (if applicable), 3) the gain/loss on disposition (if applicable), 4) the maximum cost amount, and 5) the year-end cost amount.

If it’s over $250K, it's as Nelsona has outlined for the maximum cost amount and then you would need to use the Dec 31st exchange rate for the year-end cost amount.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Just so we are clear, I believe the threshold for using the simplified method is if TOTAL foreign holdings were lees than CAD$250K for the entire year. Not just individual items.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
SM
Posts: 94
Joined: Fri Mar 20, 2015 3:43 pm

Post by SM »

Yes correct Nelsona, I agree.
groobi
Posts: 12
Joined: Thu Jun 23, 2016 9:32 pm

Post by groobi »

Thank you~
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