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Posted by scazzusof on April 18, 2007, 1:57 am
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I have a question for a tax expert. How do you go about
reporting taxes on capital gains made in foreign countries?
Also, what is the tax rate on that income? Thank you in
advance.
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Posted by L K Williams on April 19, 2007, 3:52 am
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cazzusof@yahoo.com wrote:
> I have a question for a tax expert. How do you go about
> reporting taxes on capital gains made in foreign countries?
> Also, what is the tax rate on that income? Thank you in
> advance.
You report dividends, interest, and capital gains from
foreign investments just as you would such transactions on
US investments. You must translate the amount into US
dollars using the rate that applied on the date the
transaction took place. So you need to keep records on
dollar equivalents when you make such investments.
For example, you bought 1000 shares of stock in a Thai
company on 2/15/97, when the stock was trading at 100 baht.
The exchange rate on that date was 25:1. So, you invested
100,000 baht or $4000. You sold the stock when it was
trading at 150 baht, or 150,000 baht. On the date of the
trade, the exchange rate was 40:1. So, you gained 50,000
baht, but you LOST $250 because the dollar equivalent of the
sales proceeds was just $3750!
Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
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<< The foregoing was not intended or written to be used, >>
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Posted by Han on April 19, 2007, 3:52 am
Please log in for more thread options > I have a question for a tax expert. How do you go about
> reporting taxes on capital gains made in foreign countries?
> Also, what is the tax rate on that income? Thank you in
> advance.
I have always reported the income on the day it was
credited, then converted the euros into dollars as of that
date. Cap gains occur (I think) when you transfer money
from the foreign country to (in my case) the US. Then
subtract from the US$ received in the transfer (ie minus
transfer costs), the US$ value of the currency on the day
you originally took possession in the foreign bank account.
I have used http://www.x-rates.com/ for the currency
conversions.
Hope this is clear and correct.
YMMV
--
Best regards
Han
email address is invalid
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<< The foregoing was not intended or written to be used, >>
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<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by raylopez99 on April 19, 2007, 3:52 am
Please log in for more thread options scazzu...@yahoo.com wrote:
> I have a question for a tax expert. How do you go about
> reporting taxes on capital gains made in foreign countries?
> Also, what is the tax rate on that income? Thank you in
> advance.
If you are a US citizen, you report cap gains for stocks
like any other stock. Same for dividends and interest.
Forms 1040 and the schedules A/B, D.
You do, however, have to fill out a Treasury Form (google
it) if you have a foreign stock account or a foreign bank
account with more than $10000 USD in it (collectively). But
this has nothing to do with taxes, it's an annual
requirement for foreign accounts. You mail the form to
Detroit, Michigan, not to the IRS.
Also if you trade foreign stocks through a US based
brokerage (like Charles Schwab) you do not have to fill out
this annual Treasury form, however, if you own a mutual fund
not registered in the USA you do (I have heard).
BTW the penalty for failure to fill out this Treasury Form
is a long stint in jail, so please be careful that you are
religious in filling it out annually and filing it.
RL
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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Posted by ConanOBrien on April 19, 2007, 8:30 pm
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> BTW the penalty for failure to fill out this Treasury Form
> is a long stint in jail, so please be careful that you are
> religious in filling it out annually and filing it.
Jail? I dont think so. As long as you've paid your taxes,
and have no other crimes (e.g. money laundering), you are
not going to jail. There is a civil fine of, i believe, 10k,
and even that may be able to be offered down to a lesser
amount.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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