ARCHIVED - Foreign income

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• How do you report foreign income and other amounts?
• Foreign property
• Shares of a non-resident corporation
• Loans and transfers to non-resident trusts
• Beneficiaries of non-resident trusts

As a Canadian resident, you have to report your income from all sources, both inside and outside Canada.

How do you report foreign income and other amounts?

Report foreign income and other amounts (such as expenses and taxes paid) in Canadian dollars. Use the exchange rate that was in effect on the day you received the income or paid the expense. If the amount was paid at various times throughout the year, you can visit the Bank of Canada Web site at www.bankofcanada.ca , or contact us to get an average annual rate.

Tax Tip
If you paid foreign taxes on foreign income you received, do not reduce the amount you report by the amount of tax the foreign country withheld. However, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes (see Lines 431 and 433 - Federal foreign tax credit).

Foreign property

On page 2 of your return, there is a question for you to answer about owning or holding foreign property at any time in 2004. This refers to:

• foreign property you owned; and
• your share of foreign property in which you had an interest.

Check "Yes" if the total cost of all these properties was more than CAN$100,000 in 2004. Attach a completed copy of Form T1135, Foreign Income Verification Statement , to your paper return. If you are filing your return electronically, send the form to the address in the instructions on the form.

Note
Foreign property does not include:

• property in your registered retirement savings plan (RRSP), registered retirement income fund (RRIF), or registered pension plan (RPP);
• mutual funds registered in Canada that contain foreign investments;
• property you used or held exclusively in the course of carrying on your active business; or
• your personal-use property.

Form T1135 contains more information about filing and a complete list of the different kinds of foreign property.

Shares of a non-resident corporation

If you (either alone or with related persons) held 10% or more of the shares of a non-resident corporation, you may have to file an additional return. For more details, contact us.

Loans and transfers to non-resident trusts

In 2004 or a previous year, you may have loaned or transferred funds or property to a non-resident trust. If so, you may have to complete and file Form T1141, Information Return in Respect of Transfers or Loans to a Non-Resident Trust . For more information, get Form T1141.

Beneficiaries of non-resident trusts

In 2004, you may have received funds or property from, or been indebted to, a non-resident trust under which you were a beneficiary. If so, you may have to complete and file Form T1142, Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust . For more information, get Form T1142.

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