# Tax on US cap gains



## mario 1 (Nov 6, 2009)

I am new to investing in US stocks, how does the cap gain get calculated in regards to currency difference.
If I make a $250US tax gain how and when do I calculate the rate.
thanks


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## jdbucky (Jun 7, 2010)

I could find no definite answer in the tax act. In conversation with CRA they recommended that I price the security in question in Cdn $ on the date purchased and on date sold. The difference was the gain or loss. This was also the method recommended on BNN.


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## Robillard (Apr 11, 2009)

I think you can use the exchange rate on the day/time that the transaction took place. Alternatively, I think the CRA lets people use an average exchange rate that prevailed throughout the year. This is published after the year end on the CRA's website.


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## CanadianCapitalist (Mar 31, 2009)

Here's how I do it:

Look up the exchange rate for the date your security was purchased on the Bank of Canada Currency Lookup website.

Calculate your buying price in C$ using the exchange rate determined above.

Repeat process for the sell transaction.

(Selling price - buying price) is your capital gains / loss.

You could also try the average exchange rate for the year you purchased and sold and use the method that is advantageous to you.


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## mario 1 (Nov 6, 2009)

Thanks , that sounds like a good way.


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## jdbucky (Jun 7, 2010)

CanadianCapitalist said:


> Here's how I do it:
> 
> Look up the exchange rate for the date your security was purchased on the Bank of Canada Currency Lookup website.
> 
> ...


As I understand the process once you decide on one method ie using an avg exchange rate or actual rate on day of the transaction you have to use the same method for all transactions presumably forever.


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