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Old 12-22-2014, 08:53 PM
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Talking capital gain tax on foreign currency exchange

Do you have to pay taxes on a simple foreign currency exchange?



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Old 12-23-2014, 04:42 AM
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Yes unless it is exempt by tax law; the income from currency exchange is your taxable income and is reported as capital gain long or short term depending how long you held the foreign currency ,more or less than a year.so aslongas you have a gain on a personal foreign currency transaction because of changes in exchange rates, you do not have to include that gain in your income unless it is more than $200. If the gain is more than $200, yiu need to report it as a capital gain on form 8949/Sch D of 1040. The purchase of the foreign currency itself is not taxable transaction.If you held the foreign currency more than a year , tax rate is 0% for the 10%–15% brackets; 15% for the 25%–35% brackets; and 20% for the 39.6% bracket.If you held the currency less than a year - the gain will be taxed at your regular tax rate as your ordinary gain.



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