Currency Conversion for Foreign Business Travel

A U.S.-dollar functional-currency taxpayer must translate foreign-currency expenses using an appropriate rate for when the item is paid or accrued under the tax method. A card settlement can document actual dollar payment, while the itemized foreign receipt supports what was purchased. Conversion does not replace business-purpose substantiation.

A specific business-owner situation

A hotel issues a euro invoice and the card statement later shows a dollar charge plus a separately stated fee. Recording the euro number as dollars or adding both transaction amounts would misstate the expense.

Illustrative example, not a client result.

What to establish before filing

Identify the payment currency and tax method.
Reconcile receipt to settlement and fees.
Allocate personal charges before recording the business amount.

Which fact changes the answer?

A cash payment using previously acquired currency can require different evidence from a dollar card settlement. Accrual and later settlement can also raise separate currency questions.

A mistake to avoid

Do not use an arbitrary year-end rate for an individual paid expense without a supported method.

Records that support the decision

Itemized foreign receipt.
Card or bank settlement.
Rate source and business itinerary.

The decision to document

Keep the original receipt and a traceable dollar reconciliation rather than replacing source records with an unexplained conversion.

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Sources and editorial context

General educational information prepared with AI assistance. No individual professional review is claimed. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.

My foreign hotel receipt and card statement use different currencies. Which amount supports the business travel expense?