Ammortization of foreign bonds
My name is Chris and I am an first time tax filer in the US (2013 Green Card), now living in Florida and filing jointly with my wife.
I have been putting together my 2013 number for the last couple of weeks but have hit a road block that I cannot get solved. Maybe you can help:
I derive most of my income from investments I made in the past, primarily fixed income securities, such as simple bonds. I have transfered about half of my investment to the US and just received my 1099s for different accounts. No problems there. The other half of my bonds I still hold in my "old" investment account in Austria.
Since I purchased most of my bonds at a premium above par, I would like to use the Amortization Option to hold annual amortization against interest income received from these bonds - for all my accounts.
For my US based accounts this is easy, but I have a problem calculating my amotization and adjusted annual cost basis for my overseas securities, since they are denominated in Euros.
I have all the data for original yields, exchange rates and purchase prices, I just fail to understand where and how to use the Euro/US$ exchange rate to calculate my basis, the annual amortization and the adjusted basis.
Has anyone doe something like this in the past? I would appreciate any help.