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Old 02-15-2014, 12:35 PM
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Ammortization of foreign bonds

Good Morning!

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.

Thank you
Chris



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Old 02-15-2014, 10:15 PM
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Originally Posted by Florida-Sun View Post
#1;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.

#2;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.

Thank you
Chris
#1;I guess so I guess you need to apply weighted average exchange rate against $ US to calculate/determine basis or gain/loss or etc..



#2;Igues yo must apply weighted average exchange rate between Euro and $US on the annual amort and the ADj basis. I suggest you to contact the IRS to talk to an intl taxation representative at the IRS for sure/more accurate info in detail.



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Old 02-16-2014, 07:04 PM
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Thank you for your answer - that sounds like the logical way - but is there such a thing as logic in tax law?

OK, I will try and get to the IRS. But, sorry to ask, how does that work? Do I just call up a local office and ask for their international specialist or is it walk-in? Sorry, first time filing for me.

Chris



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Old 02-16-2014, 11:48 PM
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Quote:
Originally Posted by Florida-Sun View Post


#1;Thank you for your answer - that sounds like the logical way - but is there such a thing as logic in tax law?

#21;OK, I will try and get to the IRS. But, sorry to ask, how does that work? Do I just call up a local office and ask for their international specialist or is it walk-in? Sorry, first time filing for me.

Chris
#1;I guess not perfectly precise/accurate in determining the weighted average exchange Euro agaisnt $US as you simply can't decide ultimately perfect excahnge rate bur I mean APPROXIMATE EXCHANGE RATE OVER $ US. No tax law is perfectly logical it may depedne on the situation/ each specific aspect I guess. even though many state tax law doesn't have to be logical though.


#2; I think that you do not need to contact local IRS ofice , not helpful so you can coantct the IRS , then i guess they will let you know/ lead you to whom/dept you need to contact or etc..



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Old 02-17-2014, 12:01 AM
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Join Date: Oct 2010
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Quote:
Originally Posted by Florida-Sun View Post


#1Thank you for your answer - that sounds like the logical way - but is there such a thing as logic in tax law?

#2;OK, I will try and get to the IRS. But, sorry to ask, how does that work? Do I just call up a local office and ask for their international specialist or is it walk-in? Sorry, first time filing for me.

Chris
#1;I think that nobody can determine ultimately/perfectly accurate/precise weighted average exchange rate of Euro against the US.but they just determine APPROXIMATE EXCHANGE RATE OF EURO OVER $US.The IRS even knoes about; I guess even the IRS can’t precisely determine weighted avg.foreign exchange rate against $US.
What I mean is that you need to determing an approximate weighted avg currency value of Euro over $US.
#2;I don’t think you need to contact a local IRS office on your specific issue; they are NOT helpful(as there is no repre at alocal office), so please contact the IRS. You may contact them here; Telephone Assistance



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