- Form T1135, the Foreign Income Verification Statement, is a separate information return that Canadian residents must file when the total cost of their specified foreign property exceeds…
- CRA's published guidance treats cryptocurrency held outside Canada — including on a foreign-based exchange — as potentially falling within specified foreign property, unless an exception…
- Unlike a house or a bank account, cryptocurrency doesn't have a physical location in the way older reporting rules assumed.
Plenty of Canadians who hold cryptocurrency do it through exchanges based outside Canada, often because the platform offers better pricing, more coins, or the account predates the current Canadian options. If that's you, there's a filing question worth taking seriously well before tax season: does that holding trigger T1135 foreign-property reporting, on top of whatever gain or loss you report on your regular return?
Missing this form isn't a minor paperwork slip. It's a separate compliance obligation from reporting your gains, and CRA treats it seriously. This article walks through when crypto counts as reportable foreign property, why "location" is trickier for digital assets than for a foreign bank account, and what your options are if you've already missed a filing.
What Form T1135 Is For
Form T1135, the Foreign Income Verification Statement, is a separate information return that Canadian residents must file when the total cost of their specified foreign property exceeds a threshold set out in the Income Tax Act. It doesn't calculate any tax on its own — it's a disclosure form, filed alongside your regular return, that tells CRA what foreign holdings you have. The dollar threshold has stayed fixed for a long time, but confirm the current figure before assuming you fall under it — it applies to your combined foreign holdings, not just crypto.
Does Cryptocurrency Count as Specified Foreign Property?
CRA's published guidance treats cryptocurrency held outside Canada — including on a foreign-based exchange — as potentially falling within specified foreign property, unless an exception applies. The reasoning follows from how CRA treats crypto generally: as a commodity, not currency, meaning holdings of it can be treated similarly to other foreign investment property for reporting purposes.
This is a genuinely technical area, and CRA's position has been refined over time as digital assets have become more common. If you hold any meaningful amount of crypto on a platform incorporated or operating outside Canada, treat T1135 as a real question to answer, not an afterthought.
Where Is Crypto Actually "Located"?
Unlike a house or a bank account, cryptocurrency doesn't have a physical location in the way older reporting rules assumed. The practical approach CRA guidance takes looks at factors like where the exchange or platform operating the account is based, rather than where a blockchain address technically exists. If your coins sit in a wallet you fully control — a self-custody wallet, with keys only you hold — rather than on an exchange's platform, the analysis can shift. This is one of the more unsettled corners of crypto tax reporting, and it's worth getting specific advice rather than guessing.
The Active Business Exception
Property used exclusively in carrying on an active business you run is generally excluded from specified foreign property reporting. This exception targets genuine business assets, not personal investment holdings — so a business that holds crypto as working capital for its operations may be in a different position than an individual investor holding the same coins for growth. Don't assume this exception applies without confirming it fits your actual facts.
What Happens If You Should Have Filed and Didn't
Penalties for a late or unfiled T1135 can be significant and escalate the longer the omission continues. This isn't an area to guess about, and you should confirm the current penalty structure rather than relying on any figure you've seen online.
If you've realized you missed a filing in a prior year, the Voluntary Disclosures Program (VDP) is one route to resolving it before CRA catches it independently. Under its current framework, effective October 1, 2025, the VDP distinguishes between "unprompted" applications — made before CRA has contacted you about the specific issue — and "prompted" applications, made after some CRA contact (such as an education letter) but before enforcement action like an audit. Unprompted applications can receive full penalty relief and substantial interest relief; prompted applications receive reduced but still meaningful relief. The VDP never eliminates the underlying tax owing, and CRA has discretion over every application — it isn't automatic. These figures change; verify the current relief percentages before relying on them.
Frequently asked questions
Does it matter if my crypto is worth very little right now?
The T1135 threshold is based on the cost of the property, not its current market value, so a coin that has dropped in value can still trigger the filing requirement if what you originally paid crosses the threshold.
I use a Canadian exchange but the company is incorporated abroad — does that count as foreign?
This depends on the specific structure of the exchange and how CRA's guidance treats it, which is exactly the kind of fact-specific question worth confirming rather than assuming either way.
Can I amend a past return if I forgot to file a T1135?
In some circumstances, yes, and in others the Voluntary Disclosures Program is the more appropriate route, particularly if penalties are in play. Which applies depends on your specific history and whether CRA has already contacted you.
Is T1135 the same as reporting my capital gains from selling crypto?
No, they're separate obligations. Reporting a gain or loss happens on your regular return; T1135 is an information filing about the property itself and doesn't report income or loss on its own.
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