Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
tyasiak7
Level 2

How do i report foreign exchange losses ?

 
1 Best answer

Accepted Solutions
DawnC
Expert Alumni

How do i report foreign exchange losses ?

Foreign exchange (Forex) traders fall under Section 988, which covers short-term foreign exchange contracts like spot Forex trades. 

 

Forex gains and losses are reported on your tax return as Other Income.  Report a loss as a negative number.

 

To report your Forex loss, please follow these steps:

  • Click on Federal Taxes (left menu) then on Wages & Income/Income & Expenses (up top)
  • Under All Income, locate the Less Common Income section
  • Click Show more and click Start next to Miscellaneous Income, 1099-A, 1099-C at the bottom
  • Click Start next to Other Reportable Income
  • Describe the amount as Section 988 Forex gain or loss (enter a negative number for a loss)

Foreign Exchange Reporting Discussion

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

3 Replies
DawnC
Expert Alumni

How do i report foreign exchange losses ?

Foreign exchange (Forex) traders fall under Section 988, which covers short-term foreign exchange contracts like spot Forex trades. 

 

Forex gains and losses are reported on your tax return as Other Income.  Report a loss as a negative number.

 

To report your Forex loss, please follow these steps:

  • Click on Federal Taxes (left menu) then on Wages & Income/Income & Expenses (up top)
  • Under All Income, locate the Less Common Income section
  • Click Show more and click Start next to Miscellaneous Income, 1099-A, 1099-C at the bottom
  • Click Start next to Other Reportable Income
  • Describe the amount as Section 988 Forex gain or loss (enter a negative number for a loss)

Foreign Exchange Reporting Discussion

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
geauga
Level 2

How do i report foreign exchange losses ?

Thank you, Mr. Dawn for your help.  I will try on Turbo and then give my comments.

  • Another pending issue is: where do I enter additional foreign tax credit for additional taxes paid in 2020; when income on sale of flat and foreign tax credit was filed in 2019.  If I enter this additional foreign tax credit on form 1116 without any income from sale of flat in 2020, I get nothing because 1116 uses ratios. Is there any other place where I can enter additional tax paid in foreign income? 
MarilynG1
Expert Alumni

How do i report foreign exchange losses ?

@geauga You could Amend your 2019 return to add the additional Foreign Tax paid on the 2019 income. 

 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
Privacy Settings
v