Hello Tax Experts, I have a question similar to this but slightly different. I need to show foreign currency loss in the foreign CD and want to confirm that it should be shown as ordinary loss on tax return. I transferred $25K in 2008 to India (in INR currency) and I invested the money in CD which gave good interest for which I paid taxes in US over the years by converting to USD using that year's exchange rate. In 2023, I converted that whole CD amount to USD . When I calculated the cost basis (by including all interests reinvested at different exchange rates), I can see I have a total of $30K loss. Can I show this as ordinary loss? (At least based on this article http://publications.ruchelaw.com/news/2014-05/Vol.1No.04-03_Tax%20101-FX.pdf , these should be treated as Section 988 transactions). Can you please confirm if my understanding of the article is correct and tell me how I can use TurboTax to show section 988 transactions (and the total ordinary loss)? Thanks for your help!!
