What exchange rate should be used when filing my return?
All income and expenses on your tax return must be reported in U.S. dollars. In general, you can use the exchange rate on the day a payment or expense was received or paid, or an average annual exchange rate. To use the average annual exchange rate, your income and expenses need to be earned or paid evenly throughout the year. The IRS average annual exchange rates for most currencies are posted here:
https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates
All About Randall Brody
Randall is the Founder of Tax Samaritan, a boutique firm specializing in the preparation of taxes and the resolution of tax problems for Americans living abroad, as well as the other unique tax issues that apply to taxpayers. Here, they help taxpayers save money on their tax returns.