e.g. I bought Euro 1,000 for $1,400. Now I sold it for $1,500. Is that $100 Ordinary income OR Capital gain?
TIA
Is Gain/Loss on Foreign Currency (Cash) Ordinary Income/Expense OR Capital g/L?
Dec 06, 2009
2 Replies
My answer is based on my reading of section 988, and could be wrong.
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This looks like a personal transaction, and therefore by the last stanza of the law, since the gain is less than $200 there is no taxable gain.
Assuming you sold for $1800, then the gain would be ordinary income.
What if you make a vacation to Europe and just spend the EUR 1000 over there? I would think there would be no tax.
" snipped-for-privacy@yahoo.com" wrote in news: snipped-for-privacy@g4g2000pri.googlegroups.com:
I'm not so sure. What about another example:
I inherit ?10,000.00 in 2002. In 2008 I send the quivalent of ?5,000.00 to my bank account in the US. Assuming simplified exchange rates of $0.90/? in 2002, and $1.40/? in 2009, I would have had a gain of over
50%, which I think I should have to report as capital gains, not ordinary income. At least, I have in the past followed this scenario.Join the Discussion
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