Exchange Rate question..

JoeyLaBouche · Post by **JoeyLaBouche** » Sun Mar 15, 2009 9:57 pm

I looked through the posts..maybe I'm missing it..about exchange rates...
So if I got a payout from a Canadian company in 2008 and I've been living in the usa through 2008...I know I have to do the tax credit for the 1116 to add to my world income on the 1040..but at what conversition rate is the Cdn money received last May used at for the US world income?

About 20000 gross was received and I left most of the net in a CDN account..transferring a couple thousand down in 2008..

I have heard you use the conversition rate at the TIME you received it which is ludicrous since the Cdn dollar was soaring at the time and I would have more US conversion income than say..someone who received it in November as the dollar tanked. Which doesn't seem quite balanced for one and all...

I have also heard use the Federal Reserve Rate which was about 1.0660 for canada for the year..

What do you think Nelsona? Thank you for your time.

Joe

nelsona · Post by **nelsona** » Mon Mar 16, 2009 9:28 am

You income was earned on the day you got it. The conversion rate for tax purposes was that date.

All payouts are to be valued on the day recived. periodic payouts can be converted using an average.

Why would you say its ludicrous? You received that ammount which you could (should) have instantly converted to USD.

nelsona · Post by **nelsona** » Mon Mar 16, 2009 9:38 am

Some goon news? If you use all that money left now (to either buy something or exchange into another currency), you can claim a cap loss based on the amount you exchange and the difference in rates between then and now.

Bleeding the money a bit at a time prevents you from getting the cap loss.

JoeyLaBouche · Post by **JoeyLaBouche** » Mon Mar 16, 2009 9:09 pm

Thank you for the reply...So are you saying I can claim a capital loss for 2009 if I dump the remaining CDN funds down here now? Too late for 2008 I imagine...

The IRS BTW told me to use the Federal Reserve Rate for the year couple days ago...Then i thought I better double check with you...

Joe

nelsona · Post by **nelsona** » Mon Mar 16, 2009 9:22 pm

Never listen to what IRS telephlunkies say, they are notoriously wrong, and incompetent.

The IRS docs clearly state that foreign income is supposed to be reported in US dollars based on the time it was earned.

Just because they are too stupid to be able to give you the right answer, don't accept their wrong answers. Ca,, back tomorrow and they will give you another -- probably wrong -- answer.

JoeyLaBouche · Post by **JoeyLaBouche** » Tue Mar 17, 2009 7:46 pm

Fair enough..But about my other question.....So are you saying I can claim a capital loss for 2009 if I dump the remaining CDN funds down here now? Too late to help 2008 I imagine...

Joe

nelsona · Post by **nelsona** » Wed Mar 18, 2009 4:19 am

I think I already answered that. The cap loss would be triggered in the year you made the 'sale'