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If I pay taxes on my income earned in USD, then exchange it for Euros. If the Euros had a better exchange rate to dollars later, would I have to declare a capit
by rubyfan 9y ago
If I pay taxes on my income earned in USD, then exchange it for Euros. If the Euros had a better exchange rate to dollars later, would I have to declare a capital gain if I exchange back for USD? What if instead of exchanging I just spent the Euros?
- jaycroft 9y agoIf you are a US citizen, then yes to both questions. Trading any asset for another (which would include spending EUR for goods) creates a taxable event, on which you must declare your gain on the sold asset based on its fair market value at the time of exchange. There are exemptions for certain types of property (notably section 1031 like kind exchanges for real property). I am not a tax attorney, and more specifically not your tax attorney, nor a certified accountant. https://www.law.cornell.edu/uscode/text/26 https://www.law.cornell.edu/uscode/text/26