15 December 1998 External T.I. 9832095 - FOREIGN REPORTING RULES

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: As to whether form T1141, T1142 or T1135 is required to be filed?

Position: Form T1135 required to be filed if cost amount of the property in the trust exceeds $100,000. Form T1141 and T1142 not required to be filed.

Reasons: The trust is the person resident in Canada owning foreign property

XXXXXXXXXX		 					M. Lemire
								983209
December 15, 1998

Dear XXXXXXXXXX:

Re: Foreign Reporting Rules

We are writing in reply to your letter dated November 13, 1998 in which you requested our opinion as to whether a T1141 Information Return in Respect of Transfers or Loans to a Non-Resident Trust (“Form T1141”), a T1142 Information Return in respect of Distributions From and Indebtedness to a Non-Resident Trust (“Form T1142”) or a T1135 Interests in Foreign Property (“Form T1135”) would be required to be filed in the scenario provided in your letter. You also make reference to our letter of October 29, 1998 that was in response to another letter of yours dated March 7, 1998.

We understand from your letters that you are the sole executrix of an estate who has management and control of the estate in respect of a deceased individual. We also understand that you are a Canadian citizen resident in Canada. Finally, we understand that the only property in the estate is real property situated in the United States which was valued at $16,500 at the time of the death of the deceased individual.

Our comments

Based on the information you provided, we are of the view that the estate would be resident in Canada. As a result, we would be of the opinion that you do not need to file Form T1141 or T1142.

Form T1135 would be required to be filed if the adjusted cost base to the estate of the real property situated outside Canada exceeds $100,000. The fair market value of the real property today would not be relevant for the purpose of determining the adjusted cost base to the estate of the real property. What would be relevant for this purpose is the fair market value of the real property at the time of the death of the deceased individual.

As it is understood that the fair market value of the real property at the time of the death of the deceased individual is $16,500 based on the information you provided, we are of the view that you would not be required to file Form T1135 as the adjusted cost base to the estate of the real property would not exceed $100,000. The fact that the fair market value of the real property may have fluctuated after the time of the death would not alter our conclusion.

We hope this is of assistance to you.

Yours truly,

for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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