I was recently working on a 2003 1040 for a client who had earned some income in Portugal.  The statement showing the income and tax withholding amounts was in euros.  I thought it would be an easy thing to convert these amounts to US dollars; but the normal web sites I have used in the past, such as Yahoo’s and the Wall Street Journal, only had the current exchange rates and don’t allow historical rate searches. 

Since the income was received in July of 2003, and there has been a lot of well publicized fluctuation in the exchange rate since then, I wanted to use the July 2003 rate. It took a bit of Google web searching before I found a handy free web site that does allow this kind of historical research, www.x-rates.com.  With a URL like that (x-rates), I’m sure they’re mistaken for a completely different type of web site.

Since I have a number of clients who receive income from foreign sources, this kind of conversion tool will be very handy, so I have been added it to my blogroll for quick access. 

It did make a difference.  The current exchange rate is 1.31, while it was only 1.16 back in July 2003.  On several thousand dollars of income, using the more precise figure was helpful for the client. As I always do, I attached this documentation to the 1040.

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 1/09/2005 12:44:00 PM Send this post: