Financial Channel

If I have $5K USD bought previously at $1.40 (ouch), and want to use it to pay for a cruise, do I need to convert it to CAD and repurchase the USD in order to realize the capital loss for tax purposes? Or can I just show the CRA the receipt for the purchase transaction of the USD, followed by the cruise ticket receipt showing the date that I used the USD to pay for it (date of USD disposition).

How much money did you lose??

You don't have to report a gain, and you can't claim a loss on foreign currency conversion that is less than $200 (Section 39(2) of the Income Tax Act)

Thanks for the quick reply.

Purchase: $5000USD X 1.4 = $7000CAD
Today's USD exch rate: $5000USD X 1.113 = $5565CAD

Loss = $1435CAD

Ouch

I can sympathize with that. I found a receipt from 2001 when I did the same thing for a Vegas holiday, except I bought at 1.56 and I didn't come home with too much cash either.

Speak to Revenue Canada to get the OFFICIAL WORD!