@DaveF1006 thank you so much for your in-depth response. Please allow for two follow-up questions/remark s to make sure that I understand everything correctly.
I am not in the business of currency trading, so it is great to know that my transactions can be considered "personal transaction" and I can take advantage of the associated exemption.
My follow-up question:
- You mentioned that the exemptions applies to to personal transactions with a gain below $200 per transaction.
Am I correct in assuming that this also applies to personal transactions with a loss of less than $200 , so such a transaction would equally be ignored? Or are small losses treated differently than small gains with regard to this exemption?
As an overall summary of (my understanding of) your answer, this would be the approach that I'd need to take:
- Compute the currency gain or loss for each foreign currency sale transaction separately. Ignore transactions with a gain of less than $200. (Also if the assumption in my previous question is true, ignore transactions with a loss of less than $200 as well.)
- If any transactions remain after step 1, total up those remaining transactions and report the net gain or loss as "Other Income".
- If no transactions remain after step 1 (that is all transaction fall under the exemption for personal transactions), nothing needs to be reported.
Please let me know, this summarizes your answer correctly.
Thanks again for your help. I appreciate it a lot.
