@pk Thank you very much. Quite helpful, but I am a bit confused now.
I have taken a TurboTax Live Package, and asked this question to a TurboTax CPA
The CPA initially said I have to take my currency gains/losses at the same time when I sell my stock.
But after doing some research and consulting with specialists, he came back an offered an alternate view.
His argument was basically I am not just trading in stock, but i am also trading in currency.
The only question then is whether currency impact should be taken at the same time as stock sale, or could be considered a separate event at the time of INR sale.
He essentially suggested whichever of the two methods I chose, I should be consistent.
He said if I chose to treat those as two separate events, I could use one of the two IRS clauses related to FX trading: Section 988 or Section 1256. He suggested choosing Section 988 since i have meaningful losses (the stocks I bought as well the currency both have moved unfavorably for me).
He sent me the following links as well:
https://ttlc.intuit.com/community/taxes/discussion/hello-i-just-open-a-forex-account-and-i-have-gain...
https://www.law.cornell.edu/uscode/text/26/988
I am now confused whether I can separate the two events or not
Please advise @pk
Namaste Ji!
