# Account in USD, buying in CAD?



## lyl (Apr 1, 2017)

Hi all - sometime ago I converted my registered and non registered accounts from CAD to USD. This may be a dumb question but can I still buy Canadian securities in my accounts holding the USD? I guess what I mean is I would expect I can but will this be very confused later to figure out capital gains or losses in an unregistered account if I purchase say for example the TSX index? Or should I be looking for US securities that track the TSX so I can purchase in USD?


----------



## AltaRed (Jun 8, 2009)

Depending on the brokerage you are with, it is easy to have both USD and CAD sides to each account. Use CAD to buy securities in the TSX in the CAD side if your account and USD to buy US securities in the USD side of your account.

In your non-reg account you have to account for your transactions in CAD equivalent anyway, so I don't understand your question/point. IOW, when you buy a US stock in USD, your ACB for that stock is the CAD equivalent based on the forex rate in effect on the date of settlement for that purchase. Similarly, when you sell that stock, your disposition price is the CAD equivalent based on the forex rate in effect on the date of settlement for that sale.


----------



## mark0f0 (Oct 1, 2016)

Sure, you can buy Canadian securities in USD$ accounts. For instance, most of Canada's largest firms are interlisted -- the same stock trades in USD$ on both the US exchanges, as well as in CAD$ on the Canadian exchanges. Canadian stocks, even if bought in USD$, will still pay dividends that are eligible for the Dividend Tax Credit.

One thing you need to keep in mind though is that if you buy foreign trusts/ETFs in the US that hold Canadian firms as their assets, you will not receive the benefit of the dividend tax credit and may be subject to IRS withholding tax on the dividends. So if you want to purchase an ETF of Canadian companies, it is *not* a good idea, for example, to buy EWC as a Canadian. Convert your cash and buy XIU or similar.


----------



## AltaRed (Jun 8, 2009)

You can do that but why would you, especially for Cdn stocks that issue dividends in CAD? The broker will convert those dividends into USD at the forex rates the broker chooses. Put the CAD stuff into the CAD side of the account.


----------



## lyl (Apr 1, 2017)

I really appreciate the replies! I do not have any Canadian money in my brokerage accounts, I am allowed to keep both currencies at the same time however should I add more Canadian cash. Thanks for the tip on not receiving the dividend tax credit when buying US Etf's.

Sorry for being slow but if I actually tried to purchase say XIU in USD dollars what would happen? Would it allow me to proceed?


----------



## mark0f0 (Oct 1, 2016)

lyl said:


> I really appreciate the replies! I do not have any Canadian money in my brokerage accounts, I am allowed to keep both currencies at the same time however should I add more Canadian cash. Thanks for the tip on not receiving the dividend tax credit when buying US Etf's.
> 
> Sorry for being slow but if I actually tried to purchase say XIU in USD dollars what would happen? Would it allow me to proceed?


Since XIU doesn't trade on a US exchange (to the best of my knowledge), it would either reject your order, or it would perform a currency exchange and then buy it on the TSX or any one of a number of Canadian alternative execution platforms. 

What happens thereafter depends on the broker. It could be held in the USD$ part of the account, and all the dividends converted by the broker to USD$. Or they could put in the CAD$ part of the account, and the dividends obviously would be in CAD$. 

Obviously you want to make sure you understand the behavior, and the foreign exchange fees involved (commissions and/or spreads) before you execute such a transaction. If it even allows you to execute it.


----------

