@antoinettelspenc , having gone through all the responses above/below ( which totally agree with ) from @Carl , @Critter-3 , @fanfare , I am still at a loss to understand how you would have a "foreign exchange gain" on mortgage that you are paying/paid. Assuming that you are a US person ( citizen/Green Card / Resident for tax purposes ) , own a property abroad and on which you are paying mortgage in local currency, for purposes of Itemized deductions ( Schedule- A ) you report the total in US $. Thus when the local currency moves up or down the entry reflects that in US$. The same thing happens when you report e mortgage expenses on a property abroad that you rent out ( Schedule-E ). Even if you are the mortgagee ( i.e. you are the lender ), and report this income on Schedule -C, you still would be reporting everything in US$.
I am missing something here -- please could you explain the situation a bit more?
pk
