How Do I Claim Foreign Investment Income in a Different Currency in Canada?

Taxpayers must translate income in United States dollars to the Canadian dollar.

While earning income from foreign investments is an exciting prospectus, these earnings are still taxed by the Canadian Revenue Agency. It is important that the taxpayer properly report these incomes or else he could receive a penalty on his taxes for under-reported income. The most important feature of reporting this income is the foreign currency exchange rate. The CRA requests that taxpayers use the foreign currency exchange rates set by the Bank of Canada. The income from foreign investment is mainly interest and dividends.

Instructions

1. Go to the Bank of Canada Currency Converter web page (see Resources).

2. Fill out the currency converter and convert the income. For the date on the converter, use the day you received the income. If income comes more than once during the year, use the average annual exchange rate.

3. Report the amount of the conversion on Line 121 of your tax return.

References

• Canadian Revenue Agency: Foreign Interest and Dividends

Resources

• Bank of Canada: 10-Year Currency Converter