How often to adjust ACB on USD holdings

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DavidR
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Re: How often to adjust ACB on USD holdings

Post by DavidR » 17 Jan 2018 10:17

mewmew wrote:
16 Jan 2018 13:43
When you report for clients, do you consider the FX losses as superficial loss when the large balance of US$ cash is earning interest income every month (ie. purchase of US$)?
the short answer is no. If for example start with USD 50,000 , earn 1,000 of USD interest/dividends, dispose of USD 25,000 to purchase some stock. Only 1/25th of a loss could be 'superficial'. (or 2/25ths if you count the 30 days following....) Too small for anyone to bother with.

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adrian2
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Re: How often to adjust ACB on USD holdings

Post by adrian2 » 17 Jan 2018 17:56

DavidR wrote:
17 Jan 2018 10:17
mewmew wrote:
16 Jan 2018 13:43
When you report for clients, do you consider the FX losses as superficial loss when the large balance of US$ cash is earning interest income every month (ie. purchase of US$)?
the short answer is no. If for example start with USD 50,000 , earn 1,000 of USD interest/dividends, dispose of USD 25,000 to purchase some stock. Only 1/25th of a loss could be 'superficial'. (or 2/25ths if you count the 30 days following....) Too small for anyone to bother with.
Say your US$ cash is earning 1.2% (a pretty good rate, nowadays) - that's 0.1% per month. For US$50k in cash, that's $50 monthly interest.

Only 2/1000th of a loss could be superficial, that's really inconsequential.
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