The FX-Adjusted Capital Gains Calculator computes capital gains on foreign assets (e.g. US stocks held by a Canadian investor) where the FX rate at the buy date and sell date are applied separately — as required by most tax authorities.
Here's how each value is calculated:
- Cost (CAD): Buy Price × Shares × Buy FX Rate
- Proceeds (CAD): Sell Price × Shares × Sell FX Rate
- FX-Adjusted Gain: Proceeds (CAD) − Cost (CAD)
- FX Effect: The portion of your gain/loss caused purely by currency movement, not by the asset's price change.
(1) Decomposition form of FX Effect: FX-adjusted gain − (Sell Price − Buy Price) × Shares × Sell FX Rate
(2) Canonical form of FX Effect: Buy Price × Shares × (Sell FX − Buy FX)
- Price Gain (in CAD): The raw foreign gain converted at the sell FX rate — i.e. the gain if FX had been flat.
A positive FX Effect means the home currency weakened since you bought (boosting your gain). A negative FX Effect means it strengthened (eroding your gain).