I exchanged large amount of canadian dollars to US dollars in 2004. I received this money in early last year in Canadian dollars as I withdrew RRSP. I reported RRSP income I received, in US dollars on the date of withdrawal and everything was good with IRS.
I kept the money in my canadian account until late in the year to get a better exchange rate. Then I actually made money from the exchange. My gain was about US$200 from the currency exchange. I just found out that I supposed to report the capital gain? or so to IRS on currency exchange.
I have to go back and do my taxes again to report this to IRS. But I don't know where to report this. Do I have to file Schedule D? I read in the schedule D, it says use worksheet on page 34 of 1040 instruction to figure out taxes or use schedule D on certain situations. I have no experience with schedule D. Please help
Capital gain from currency exchange?
Moderator: Mark T Serbinski CA CPA
Schedule D is purely an IRS tax matter, which is really beyond the scope of this board in my opinion.
Get your self some tax software, and schedule D become simple.
But, yes, you have to treat your Cdn dollars as if they were a mutual fund, and each time you buy and sell CDn dollars (for example everytime you exchange money or buy something with Cdn dollars) you are actaully making a transaction that triggers cap gains/losses in US terms.
There is a lower threshold to this, such that you do not have to keep track of each time you bought a sick of gum, and it is exactly $200. If you made less than $200 US in a single transaction it is not reprtable, over $200 is all reportable.
IRS publication 525.
<i>nelsona non grata... and non pro</i>
Get your self some tax software, and schedule D become simple.
But, yes, you have to treat your Cdn dollars as if they were a mutual fund, and each time you buy and sell CDn dollars (for example everytime you exchange money or buy something with Cdn dollars) you are actaully making a transaction that triggers cap gains/losses in US terms.
There is a lower threshold to this, such that you do not have to keep track of each time you bought a sick of gum, and it is exactly $200. If you made less than $200 US in a single transaction it is not reprtable, over $200 is all reportable.
IRS publication 525.
<i>nelsona non grata... and non pro</i>