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RSU and foreign currency

Let me describe my situation on a hypothetical example:

I received 100 stock units traded at foreign stock exchange (different currency), 40 of them were sold to cover. The 1099-B I received from broker lists them as $100 a piece so the reported proceeds are $4000.
My W-2 includes the RSUs but using a different currency conversion rate: 100*$105 = $10500. 

Is there anything special I should do to report this?

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1 Best answer

Accepted Solutions

RSU and foreign currency

You said the 100 RSUs you received were reported as part of your earned income on your W-2 at $10,500 .  A US person must use US$ as their functional currency.  The exchange rate used is that existing when you received them (I assume) so your basis is $105 per RSU.  When you sold 40 of them you said your broker sent you a 1099 B that showed the proceeds as $100 each or $4,000.  If the sale took place using US$s as its currency and you received $4,000 then you had a loss - Long or short term depending how long you owned them - since your basis in 40 RSUs is $4,200.   I assume this is what happened.  If I misunderstood and the sale is 4,000 of some other currency then you convert it to dollars at the rate existing when the sale took place and that is your sales price.  If you hold the 4,000 in the other currency after the sale you might have a gain or loss due to the exchange fluctuation.  that is ordinary gain or loss.  For example if you received 4,000 in the other currency and the exchange rate is 1.07 you received $4,280 in $s and that is your sales price.  If you held the 4,000 of other currency after the sale and converted it when the exchange rate was 1.10 you received $4,400.  This means you had ordinary income of $120 .   The transaction gets reported just as any other sale of a capital asset.

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3 Replies

RSU and foreign currency

You said the 100 RSUs you received were reported as part of your earned income on your W-2 at $10,500 .  A US person must use US$ as their functional currency.  The exchange rate used is that existing when you received them (I assume) so your basis is $105 per RSU.  When you sold 40 of them you said your broker sent you a 1099 B that showed the proceeds as $100 each or $4,000.  If the sale took place using US$s as its currency and you received $4,000 then you had a loss - Long or short term depending how long you owned them - since your basis in 40 RSUs is $4,200.   I assume this is what happened.  If I misunderstood and the sale is 4,000 of some other currency then you convert it to dollars at the rate existing when the sale took place and that is your sales price.  If you hold the 4,000 in the other currency after the sale you might have a gain or loss due to the exchange fluctuation.  that is ordinary gain or loss.  For example if you received 4,000 in the other currency and the exchange rate is 1.07 you received $4,280 in $s and that is your sales price.  If you held the 4,000 of other currency after the sale and converted it when the exchange rate was 1.10 you received $4,400.  This means you had ordinary income of $120 .   The transaction gets reported just as any other sale of a capital asset.

RSU and foreign currency

You got it right - the sale was 4000 USD. Also the exchange rate used in W-2 is much closer to that day's average exchange rate I found online. So since this was a sell-to-cover transaction the loss was short term and due to broker's poor exchange rate. After I fill in these hypothetical values in TurboTax  this is what I see in Form 8949:

b) and c) are the same (date aquired and date sold)
d) proceeds as reported on 1099-B ($4000)
e) cost basis is not reported on 1099-B so it shows as $0
f) Adj. code O
g) Amount of adjustment -$4200
f) Gain/loss: -$200

Does this look about right?

AmyC
Expert Alumni

RSU and foreign currency

Yes. Great job! My only other thought would be adding the expenses of the sale for a little more loss, if you had any.

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