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If a US citizen resides in Canada he's required to file a Canadian Federal return, a provincial return, and then a US Federal return, claiming a foreign tax credit for the taxes paid in Canada on the US return.

Capital gains are taxed at 50% * your marginal tax rate in Canada.

If you have large enough capital gains you pay estimated taxes (Instalment payments in Canada) just like here in the US.

My question is what if you have a US brokerage account denominated in US dollars and you sell something for a capital gain? The cost basis and net proceeds gains are all in US dollars. What's the law say on how that gets translated to Canadian dollars in a tax return? Is it the exchange rate on the day of sale or some other method?


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