Convert Euro to Dollar

You must convert any foreign currency, including Euros, into US dollars for reporting on your US tax return. Generally, the prevailing exchange rate (spot rate) at the time of the transaction should be used for conversion. This applies to both income received and expenses paid in Euros.

There is an exception for certain qualified business units (QBUs) which may use a functional currency other than the US dollar. If a QBU has a functional currency that isn’t the US dollar, income calculations are made in that currency and then translated to US dollars using the appropriate exchange rate.

Additionally, you might need to account for foreign currency gain or loss on specific transactions. Consult Section 988 of the Internal Revenue Code and its regulations for further details. US tax payments must always be made in US dollars to the Internal Revenue Service (IRS).

The IRS doesn’t have an official exchange rate and generally accepts any consistently used posted rate. If a country uses multiple exchange rates, use the one relevant to your specific situation. Note that the exchange rates provided for general information do not apply to tax payments. The IRS uses the bank’s conversion rate on the processing date, not the date the IRS receives the payment.

For converting Euros to US dollars, you can refer to publicly available resources like those listed on the IRS website for foreign currency and exchange rates. You can also use other consistently applied posted rates. To convert from Euros to US dollars, divide the Euro amount by the applicable yearly average exchange rate. Conversely, multiply the US dollar amount by the yearly average exchange rate to convert US dollars to Euros. Remember to maintain consistency in the exchange rate used.