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Old 02-15-2014, 12:35 PM
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Join Date: Feb 2014
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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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