Currency cap gains tax impact on US return?

[fangle]

I’m dual citizen, Canadian resident.

I am wondering if a Canadian cap gains tax incurred due to currency fluctuations has an impact on my US return?

In my case, the investment was a USD debenture purchased with USD in 2012 when the exchange was close to par and redeemed in 2018 when USD was higher. I learned about, then reported and paid the cap gains tax on the difference in exchange on my Canadian return. On my draft US return, I have reported the sale but since it was purchased and redeemed for the same value in USD, it has no impact as far as I can see. I’m now trying to determine if I should be entering anything regarding the Canadian cap gains tax on the foreign tax credit section (form 1116) of my US return?

I don’t have any US taxes due as all of my income is excluded foreign wages save for a small amount of interest, but would like to understand what is correct in any case.

Cheers

[nelsona]

There is no currency issue on your 1040. The tax you paid in Canada can be used on a passive income 1116, carried forward perhaps for future years, but there will be no credit that year, from what you say.

[fangle]

Thank you. I've added the Canadian tax to the passive income section of my form 1116 for the carry forward. Appreciate it.