Despite doing a lot of research, I'm having a very hard time getting confident in the answer to this question:
Suppose I inherit 6 figures of Japanese Yen in 2022. It sits around in a foreign currency account in a US bank until 2024. At that point the Yen is used to purchase Japanese stocks (denominated in Yen). Based on the change in exchange rate between 2022-2024, should I claim a capital gain/loss?
Similar but slightly modified scenario:
Supposed the Yen referred to above was not inherited, but instead was obtain during the course of my whole life of employment in Japan, before moving to the United States in 2022. Then as above in 2024 the Yen is used to purchase Japanese stocks. Again, the question is, is there a capital gain or loss associated with the foreign currency exchange in 2024? In this case the cost basis is super complicated, based on when I earned the money.
I have an accountant telling me that yes, the correct thing to do is claim a capital gain/loss in either of these scenarios. For the second scenario, some kind of average cost basis could be used.
In theory this makes sense to me, but I'm very confused by the fact that I can find nearly no discussion online of people doing this. Scenario 2 in particular seems like it would be very common. Millions of people move to the United States each year, and some large fraction of them must at some point convert their foreign money to USD. Especially given the complex cost basis I would expend tons of conversation about how to do this, but I find none.
