A taxpayer who trades in U.S. securities on income account maintains a Canadian dollar and U.S. dollar account with an investment dealer and, when it sells and buys stocks for or with U.S. dollars, it deposits into, or withdraws from, the U.S. dollar account, as applicable. CRA stated:
[T]he CRA would accept the method used to calculate the foreign exchange gain or loss in respect of your foreign currencies deposited with the investment dealer in both of your accounts at the time there is a transaction either converting to Canadian currency or purchasing out of the U.S. dollar account, with such method providing for the calculation of the foreign exchange gain or loss by multiplying the amount traded by the difference between the rate on the date of the transaction (conversion or purchase) and the historical rate in effect at the time the money was deposited in the U.S. dollar account (average historical rate where multiple transactions affect that account). …
CRA also indicated that FX gains or losses would be realized on a USD payable for the acquisition of shares as that payable was settled.