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Level 1

TL 2, Converting US Visits to Canadian currency

 I am completing TL2 for the trucking client regarding US visits. Same amount can be claimed on TL2 in us currency. Now the total amount of the claim which is coming up on line 229(us and cdn visits). I have to convert US currency to Canadian currency and thinking of changing line 229 by converting only the us visits at the annual exchange rate from bank of Canada. I like to have any suggestion on the issue. 

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Best answer June 02, 2020

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Level 3

TL 2, Converting US Visits to Canadian currency

It's been a long time since I did one of these for US trips, but if I recall correctly the conversion was made on the TL2, not on line 229. Assuming these are long-haul truck drivers, in Part 2B there would be at least two lines of entries (one accumulated total for meals in Canada and the other for in the US). On the Canadian side of the border, using the simplified method the employee would be claiming the standard $17 per meal at the 80% allowable rate. Profile does that automatically. The second line would have a notation in the "away from home terminal" box that these meals were for US trips in US dollars. Profile initially calculates the amounts at the same $17 per meal rate as it did on the line above for Canadian meals. I would over-ride the calculated amount on that line to convert the US$ limitation to Canadian dollars at a $22.07 per meal rate. The total of the two lines will be correctly added together and subsequently converted to the allowable 80% rate for long haul drivers.

CRA did specify that one had to use the average US exchange rate for the year, not the specific exchange rate for the day.

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Level 3

TL 2, Converting US Visits to Canadian currency

It's been a long time since I did one of these for US trips, but if I recall correctly the conversion was made on the TL2, not on line 229. Assuming these are long-haul truck drivers, in Part 2B there would be at least two lines of entries (one accumulated total for meals in Canada and the other for in the US). On the Canadian side of the border, using the simplified method the employee would be claiming the standard $17 per meal at the 80% allowable rate. Profile does that automatically. The second line would have a notation in the "away from home terminal" box that these meals were for US trips in US dollars. Profile initially calculates the amounts at the same $17 per meal rate as it did on the line above for Canadian meals. I would over-ride the calculated amount on that line to convert the US$ limitation to Canadian dollars at a $22.07 per meal rate. The total of the two lines will be correctly added together and subsequently converted to the allowable 80% rate for long haul drivers.

CRA did specify that one had to use the average US exchange rate for the year, not the specific exchange rate for the day.

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Level 1

TL 2, Converting US Visits to Canadian currency

Thanks, I again checked TL2, I do not see two  see two line of entries(totals for meals for Canada and US) Only on line 8528 which is picking up total from Part 2B, In fact all the visits were in US crossing the border, I mentioned home terminal in Canada and  (away from Terminal) destination for all visits US so the total becomes all US.   However on another excel sheet I have segregated Canadian and US meals and used the annul exchange rate for US meals and override the amount on line 229
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TL 2, Converting US Visits to Canadian currency

Sorry, I should have explained a bit further. The TL2 in Profile is an expandable form, like so many others in the software. So as soon as you enter the amounts on one line right up to the number of meals bought and then tab over once more, a new line automatically pops up just below allowing further input on that new line. You can get a virtually unlimited number of reporting lines in Profile, which was one of it's big selling points when I first bought it decades ago..

The only thing I'm not comfortable about is over-riding line 229 instead of the meal costs on the TL2. This may just be me getting over-cautious about the possibility of a conflict showing up between the TL2 and line 229 when you efile. I really have no idea if this is a concern.
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TL 2, Converting US Visits to Canadian currency

Thanks, I also noticed that on TL2 Part B It is mentioned at the top cost in Canadian dollars. This is one eligible trip starting in Canada and continuing in US and thereafter returning to canada(Eligible trip more than 160km in 24 hours) some hours in Canada and rest in US. If I try to break one eligible trip into two one in Canada and one is us then in Canada portion do not seems to be eligible.
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Level 3

TL 2, Converting US Visits to Canadian currency

I think I understand where you are coming from. Maybe the driver takes 3 hours to get to the border on the Canadian side, grabs a bite to eat before hitting customs just in case he gets held up there for hours on end, then spends the next 10+ hours driving along the InterState before he hits his mandatory rest time. This is where I'd just fudge things if you're worried about having only 3 hours on the "Canadian" line which would mean even one meal isn't eligible. Put the full day on both lines, claiming $17 on the one line and over-writing to claim $44.14 on the other after converting the US allowance into Canadian dollars.

Obviously, you're not going to enter trips one by one on the TL2; that is what your spreadsheet and working papers are for, to summarize how you came up with the total claim. But I wouldn't have any problem with equal hours on both the Canadian and US "lines". It would be easily explainable to CRA in the event of any audit--a knowledgeable auditor would understand that it is a long haul trip which goes through two countries.
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TL 2, Converting US Visits to Canadian currency

Thanks, As all the visits are in US and agree with the 2 to 3 hours at the border so total claim becomes US  and converting to exchange rate, I think I will have to override around 70 lines in 2B area, I was just wondering is this going to be acceptable to CRA? Earlier I did reconciliation on the excel sheet  with taking total meals from TL2 and  took out candian and US(majority US) and used exchange rate on US and override the line 229 and not sure which one will be more appropriate?
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Level 3

TL 2, Converting US Visits to Canadian currency

This is an interesting discussion and heading in directions I never expected. I've done plenty of Tl2s over the years, just hadn't dealt with a US bound driver for some time. But in all those years, I don't think I've ever used more than four or five lines in the TL2, some being short haul, and others long haul. The TL2 is is not the same as a medical expense worksheet which has dates and specific taxpayers, as well as different types of medical expenses so that you could have dozens and dozens of separate entries.

What I'm getting at is that I ask my driver clients to refer to their log book and provide me with a total number of days on the road which may, or may not, differ from the number of trips. The third box is asking for Average no. of hours per trip, not a one by one listing of each trip and the specific number of hours on that one trip.

The upshot of all that is that I may have one line showing 126 days, 126 trips, with an average of 12.5 hours per trip. Beyond the details of home terminal and away from home terminal, the number of meals on that same line might read 352, which is less than the maximum daily amount of 3 simply because my driver is honest enough to say that on some of those 126 days, he only had two meals. Remember that we were talking about an average number of hours per trip, so some of those trips might have only been 6-7 hours. As soon as I enter 352 meals, the software automatically calculates the applicable cost in Canadian dollars. Because of the US situation, you'd have a different line to cover meals on that side of the border calculated at 22.07 per meal.

I did not mean to imply earlier with that example of one Canadian meal and two US meals for the day that you had to put things in one line at a time. That's doing way more than you're expected to do. In the event of an audit, the auditor is going to ask for the log book so verify to his or her satisfaction that the total entered is a reasonable total. The auditor is not going to match up the log book to a lengthy TL2 list, trip by trip.
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TL 2, Converting US Visits to Canadian currency

Thank you for your help. This was my first experience with the trucking client and I got very detailed logbook details and will be more careful based on your feedback in future.