I am assuming these issues are related. I am working in Canada for a US company. I buy stock options every quarter. In 2011 I cashed in some stock options and received the cash.

How do I enter the amount of received cash in my Canadian tax return? Does it matter the cash came from an employee stock option?

I also received form 1042-S from the US company that handles the stocks. It lists a Gross Income of $77 (box 2), a tax rate of %15 (box 5), and Federal tax withheld of $12 (box 7).

Where, if anywhere do I record this in my tax return.

3 Answers 3


I can't give you a specific answer because I'm not a tax accountant, so you should seek advice from a tax professional with experience relevant to your situation. This could be a complicated situation. That being said, one place you could start is the Canada Revenue Agency's statement on investment income, which contains this paragraph:

Interest, foreign interest and dividend income, foreign income, foreign non-business income, and certain other income are all amounts you report on your return. They are usually shown on the following slips: T5, T3, T5013, T5013A

To avoid double taxation, Canada and the US almost certainly have a foreign tax treaty that ensures you are only taxed in your country of residence. I'm assuming you're a resident of Canada.

Also, this page states that:

If you received foreign interest or dividend income, you have to report it in Canadian dollars. Use the Bank of Canada exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate.

You should consult a tax professional. I'm not a tax professional, let alone one who specializes in the Canadian tax system. A professional is the only one you should trust to answer your question with 100% accuracy.


There are two parts in this 1042-S form. The income/dividends go into the Canada T5 form. There will be credit if 1042-S has held money already, so use T2209 to report too.


Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .