@DaveF1006 Thank you for sharing the IRS Reference document on Section 988. It seems like I can apply section 988 on the forex losses as long as I can demonstrate:
1) a CD is a debt instrument (although not specifically mentioned in the reference guidelines). For instance, the answer to the question, "Is a cd a debt instrument?" on wikipedia, or for that in any fixed income textbook is - "Certificates of deposit (CDs) and bonds are both debt-based, fixed-income securities". Also, many CD's are routinely traded like securities in the marketplace. Economically, of course, there is no difference between a CD and a zero-coupon bond with the same maturity. So, my hope is that common sense can prevail.
2) prove the funds were meant as an investment, not a personal transaction . To this effect, the fact that I invested in a 10-year CD, rather than 3-month, 6month etc., should hopefully carry some weight. Along with emails demonstrating investment intent. Lastly, as I mentioned, there were no other transactions other than the initial investment and repatriation, that were carried out /commingled in the specified account.
@DaveF1006 Would you concur with this?
Thanks again for your guidance - I am surprised this issue is not clear cut for CDs - for foreign bonds, the guidance seems pretty straightforward.
@Mike9241, do you think my interpretation above makes sense?
