Reporting USD trades on your Canadian return

The CRA requires amounts on your return to be reported in Canadian dollars. Its capital-gains guidance says to convert proceeds at the exchange rate in effect when you sold, adjusted cost base when you acquired, and outlays and expenses when incurred.

Sched3's securities ledger uses the recorded trade date for acquisitions and dispositions and preserves settlement date separately as broker evidence.

The Bank of Canada publishes daily exchange rates at bankofcanada.ca/rates/exchange/daily-exchange-rates/. The specific series is FXUSDCAD — the number of Canadian dollars per one US dollar.

Look up the observation required by your documented transaction-date methodology. If no observation exists for that date, document the consistent fallback used.

Sched3 stores the recorded rate, applicable date, and source. It blocks filing readiness when that provenance is missing.

When you buy a US stock, your adjusted cost base is recorded in Canadian dollars:

ACB (CAD) = (USD purchase price x units + USD commission) x BoC rate on applicable transaction date

This CAD figure is what gets pooled with your other holdings of the same security and becomes the cost base you subtract from proceeds when you eventually sell.

When you sell, your proceeds of disposition are also converted to CAD at the BoC rate on the sell applicable transaction date:

Proceeds (CAD) = (USD sale price x units - USD commission) x BoC rate on sell applicable transaction date

Your capital gain or loss is then: Proceeds (CAD) - ACB (CAD) - outlays

Note that even if the stock price in USD didn't move, you can still have a capital gain or loss in CAD due to exchange rate movement between the buy date and sell date.

If you hold US dollars in your brokerage account (for example, after selling a US stock and before buying another), the USD itself is considered property. Converting it back to CAD at a different rate than you acquired it creates a capital gain or loss on the currency.

In practice, the CRA provides a $200 annual exemption on FX gains from personal transactions. Most investors with small USD balances won't exceed this, but active traders or those holding large USD cash positions should be aware.

When the FX gain/loss is embedded in a stock transaction (you buy and sell a US stock), it is already captured in the CAD proceeds-minus-ACB calculation — no separate reporting needed.

US-dollar dividends also need to be converted to CAD. However, your broker's T5 or T3 slip usually reports the Canadian-dollar equivalent already (they convert at their own rate, which the CRA accepts if it's a Canadian financial institution).

If you receive a foreign income slip or your broker doesn't convert, use the BoC rate on the dividend payment date.

US withholding tax (typically 15% on dividends in a non-registered or TFSA account) is also reported in CAD on your return, and claimed as a foreign tax credit on form T2209.

• Applying one annual average indiscriminately — Acquisitions, dispositions, and outlays arise at different times and need their applicable conversions.
• Leaving the date methodology implicit — Record the exact date the ledger uses and keep settlement date separately as source evidence.
• Using an undocumented broker rate — A broker rate may be usable, but retain evidence that makes the source and methodology verifiable.
• Forgetting the FX component of the gain — If USD strengthened between your buy and sell, part of your gain in CAD is currency appreciation, not stock appreciation. Both are taxable.
• Double-converting — If your broker slip already shows CAD amounts, converting again would be incorrect. Check the currency on your T5008.