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    yianni2010's Avatar
    yianni2010 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 12, 2010, 09:02 AM
    Is the difference between currency exchange rates taxable
    If I have 20,000 euros in a bank abroad in Europe and the exchange rate
    Is $1.40/ Euro the money that I will transfer here to the States will
    Be equivalent to $28,000. Is the 8,000 difference between currencies considered
    An income based on the increase and therefore a tax liability ?

    Yian2010
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
    Uber Member
    		  
    #2

    May 12, 2010, 09:33 AM

    Hello y:

    You'll have more dollars than you had euros, but you won't have made any INCOME. Therefore, there'll be no income tax due.

    However, if you bought euros cheaper than you're selling them for, there MIGHT be a capital gains tax.

    excon
    The Texas Tax Expert's Avatar
    The Texas Tax Expert Posts: 310, Reputation: 7
    Full Member
    		  
    #3

    May 12, 2010, 05:38 PM

    Well, Excon is partly right. There will be a currency gain if you bought them for less than the current exchange rate but it will be ordinary income.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #4

    May 12, 2010, 10:41 PM
    No it is not income.
    If you buy or sell currency, you have taxable income or loss.
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