# Calculating Capital loss/gain on US Equities held in Canadian Cash account



## topgun3 (Jan 18, 2014)

Let me setup an example of my scenario.

I have a Cash account at Scotia iTrade where I hold Canadian equities. In 2013 I decided to start buying US equities. I asked iTrade to setup a parallel account that shows everything in USD. Anytime I make a purchase of a US equity I have to designate a transfer from my CAD side to my USD side to cover the purchase (if there isn't enough USD to cover the transaction). If I sell the USD equity and incur a loss/gain but DON'T convert the cash back to CAD, how would I calculate my capital loss/gain if my money wasn't converted back to CAD$? I can't (at least to my knowledge) express my capital gain/loss in USD on my Canadian return...and since I never converted back to CAD$, and I don't intend to anytime soon. how would I deal with that situation?

I'm pretty sure I'm not the first person to have to resolve this issue.....and I would like to be as accurate as possible.


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## Synergy (Mar 18, 2013)

I've yet to have to deal with such a situation, but I'm assuming you'd simply convert to CDN$ for tax purposes on the day you triggered the loss or gain.

Here's an example I found:
http://www.milliondollarjourney.com...tal-gains-tax-in-a-non-registered-account.htm


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## Guban (Jul 5, 2011)

+1
Don't forget to calculate the ACB in Canadian dollars too.


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## atrp2biz (Sep 22, 2010)

The Bank of Canada publishes daily historical FX rates going back 10 years. By using a spreadsheet that logs your capital gains, you can download this data into a .csv file and use the VLOOKUP function to automatically pull FX rates on your trade date into your trade log.


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## topgun3 (Jan 18, 2014)

atrp2biz said:


> The Bank of Canada publishes daily historical FX rates going back 10 years. By using a spreadsheet that logs your capital gains, you can download this data into a .csv file and use the VLOOKUP function to automatically pull FX rates on your trade date into your trade log.


Sounds like the most logical way of doing it. If I had to transfer money into my USD account, I will use the actual fees incurred (exchange + fees), but if I'm figuring out the value while still in USD, I will use the published FX rates for that day.


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## AltaRed (Jun 8, 2009)

The way I calculate my ACB (in CAD) for USD purchases (whether purchased using CAD or USD funds) is to use the BoC Noon rate on the day I made the purchase, and when I sell, the same thing.... I convert to CAD for the purposes of calculating Cap Gains or Losses at the BoC Noon rate on the day I made the sale. Some folks use Settlement Day since that is when the actual cash transaction occurs but I have always disagreed with that approach. A purchase or sale could move a lot in market price (and/or forex rate) in the 3 days until settlement.


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## Zeeshanbmerchant (Jan 4, 2014)

Settlement day is absolutely not allowed. Transaction date and average annual exchange rate are allowed

if you are smart, you do both and pick the ones that works best for you

but by the way i understood your post, you mentioned that you usually take the gain on when you transfer the money into CAD. That is using the settlement rate, if you use average, you have to use the same average for all your capital gains.

http://www.cra-arc.gc.ca/tx/ndvdls/fq/xchng_rt-eng.html

By the way, it looks very much like to me you are carrying on a business, especially due to frequency, and expectation of profit


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## Synergy (Mar 18, 2013)

Guban said:


> +1
> Don't forget to calculate the ACB in Canadian dollars too.


In order to calculate ACB, do you know if you could use the transcaction date for the purchase and sale price and the average yearly rate for the dividend payments (DRIPS)? OR, would you be required to use the transcation date for all the individual dividend payments if you decide to utilize the transcation date for the purchase / sale? I figured I should run thru a scenario before I end up having to sell one of my US holdings.


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## AltaRed (Jun 8, 2009)

Synergy said:


> In order to calculate ACB, do you know if you could use the transcaction date for the purchase and sale price and the average yearly rate for the dividend payments (DRIPS)? OR, would you be required to use the transcation date for all the individual dividend payments if you decide to utilize the transcation date for the purchase / sale? I figured I should run thru a scenario before I end up having to sell one of my US holdings.


Use the actual transaction dates for the buy/sell of the assets and the annual rate for all the distributions. The rationale is simple: It is easy to keep track of the few* asset buy/sells one does each year, especially those that are substantive in size. Doing that for all the small income distributions would be a nightmare and would likely vary little, if any, from the annual average anyway.

* It might be different for frequent traders for which the annual rate may be more relevant and just as accurate. I have no insight into that situation.


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## Synergy (Mar 18, 2013)

^ That's what I figured, thanks AltaRed.


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## Guban (Jul 5, 2011)

You only have a choice of using the average annual exchange rate if there are mulitple transactions according to CRA (http://www.cra-arc.gc.ca/tx/ndvdls/...g-ncm/lns101-170/127/clc-rprt/menu-eng.html):

"Report your gains or losses in Canadian dollars. Use the exchange rate that was in effect on the day of the transaction or, if there were transactions at various times throughout the year, you can use the average annual exchange rate."


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