Do I get tax credit if my CD balance in a Indian bank when coverted to USD is lower than last year’s balance in USD due to currency rate changes between 2 yrs?

[Garima]

Taking some numbers for example below.

 Last year, my bank balance was say 5,00,000 INR = 7843 USD (using exchange rate for 2017 noted in <a rel="nofollow" target="_blank" href="https://fiscal.treasury.gov/reports-statements/treasury-reporting-rates-exchange/historical.html">ht...)
       Interest rate for this fixed deposit amount = 5%
       Current balance including interest income = 5,25,000 INR i.e. 7521 USD (using exchange rate for 2018 noted in <a rel="nofollow" target="_blank" href="https://fiscal.treasury.gov/reports-statements/treasury-reporting-rates-exchange/historical.html">ht...

       If I just look at interest deposited by the bank, I made interest income of 25,000 INR i.e 358 USD.  Am I supposed to pay tax on this income though overall there is a loss  (or) should I just report zero interest income (or) is there a way I can report the loss in this investment and reduce my tax liability from other investments/income I made in US.

[Anonymous]

no.  it's no different than if you owned a stock that bought in 2018 for $4000 and at the end of 2019 was worth $3000 

[Garima]

So how should i report the negative interest?  In past i have put the positive interest (this years balance in USD minus last years balance in USD) in Turbotax for say Bank X.  Should i now report the negative interest value in that place?  or should i be entering ZERO.

[Garima]

We don't pay taxes in stocks when the value changes.  But we pay tax on interest accumulated in CD every single year.  so i don't see how that is apples to apples.

[JulieS · Accepted solution]

You should enter $0 as the amount of interest.

You don't report negative interest amounts and you can't take any type of credit or loss, for the decline in the value of a deposit account.