Mortgage exchange rate gain
When you consider the closing value of the mortgage back in 2011, you get $309000 USD, because the Canadian dollar was worth so much more in 2011. *The difference in these two numbers is $36000, and I therefore made $36000 in foreign exchange on the mortgage. * I have to pay taxes on this foreign exchange gain. The gain or loss from selling foreign real estate is calculated by subtracting the purchase price converted to the U.S. Dollar with the exchange rate at the time of purchase, from the sale price converted to the U.S. Dollar using the exchange rate at the time of sale. As a US citizen, the sale of your principal residence will prompt a gain or loss that is reportable on your tax return. However, if you have owned and lived in this home for at least two of the last five years, then you will be eligible to exclude a gain of up to $250,000 ($500,000 for married taxpayers) from taxation.