Back in 2014, I bought my apartments in Russia using a mortgage from a local bank. USD/Ruble rate was about 40.
In 2017, I won a green card, refinanced my mortgage in another Russian bank (better terms), moved to the US and paid off my new mortgage using money earned in the US. USD/Ruble rate was about 60 (i.e. ruble fell 50% down during the start of my first mortgage).
Given that I started earning in USD having a debt in rubles, is there any gain or income based on the currency rate difference?
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Since you are not in the business of currency trading, you do not get to deduct for "losses'. So in your case -- you have a property in Russia which was originally bought for XXX Rubles --- this is your basis in the property in US$ on the day of the transaction. If and when you sell the property, the gain in US$ would be ---- > Sales price LESS sales expenses LESS your adjusted basis in the property. The adjusted basis is the original basis plus cost of any improvements LESS accumulated allowable depreciation --- all the Rubles need to be converted to US$ of the day ( i.e. time of the transaction / action). Your mortgage payments are recognized as expenses/ deduction either on schedule-E ( if you rent out the property ) or as second / vacation home ( if you use the property as such). There are many other variables / situations to consider -- therefore the answer is rather general in nature.
hope this helps
Since you are not in the business of currency trading, you do not get to deduct for "losses'. So in your case -- you have a property in Russia which was originally bought for XXX Rubles --- this is your basis in the property in US$ on the day of the transaction. If and when you sell the property, the gain in US$ would be ---- > Sales price LESS sales expenses LESS your adjusted basis in the property. The adjusted basis is the original basis plus cost of any improvements LESS accumulated allowable depreciation --- all the Rubles need to be converted to US$ of the day ( i.e. time of the transaction / action). Your mortgage payments are recognized as expenses/ deduction either on schedule-E ( if you rent out the property ) or as second / vacation home ( if you use the property as such). There are many other variables / situations to consider -- therefore the answer is rather general in nature.
hope this helps
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