I opened a CD in India which has a maturity period of 5 years. The interest compounds quarterly. I will not get any actual distribution from the CD till the 5 years are up. I have been paying tax on the interest income accrued each year. In 2018, the Indian currency weakened quite a bit. I have this question: I am wondering if I am eligible to offset the interest income by this 'loss' in currency rate. If the currency moved in my favor, this would result in a gain that would need to reported similarly. I searched for this topic online and am getting conflicting results. For example, in this post, the author suggests that it is possible to include a negative income related to loss on currency exchange:
- posted
4 years ago
formatting link
However, another user claims that this is not allowed:
formatting link
Yet another user thinks this loss can be reported as Section 988 loss:
formatting link
Please advise. Thanks