Sending money to US account back home -- Currency conversion / coupon taxable?

[shanesnh]

So I have a unique question. I used a popular service called WireBarley to send Korean Won to US Dollars back to my US Account.

When you sign up, you get a couple 3,000 Korean Won coupons for signing up and if you had a referral code, you get a 10,000 Korean Won coupon.

I assumed these would only be valid to cover the service's fees and thus not be taxable since it's a discount/rebate.

BUT, interestingly enough, even if the fee is ZERO (which it is if you send 1,000,000 Korean Won or more), you can still use the coupon to reduce what you need to send to them for the transaction. 

So, I have example photos. The first shows if you want to send 1,000,000 Korean Won to US Dollars and select the coupon, you no longer need to even pay the full 1,000,000 Korean Won. It takes 10,000 Korean Won off of that as well meaning you only pay 990,000 Korean Won to send and then receive the SAME AMOUNT of US Dollars.

The second screenshot shows an actual transaction I did. 2,500,000 Korean Won, Fee of 0 Korean Won, Coupon for 10,000 Korean Won, and the total I had to pay was 2,490,000 Korean Won for the same amount of USD 1,783.75 whether I used the coupon (and got 10,000 Korean Won off: 2,490,000) or not (and paid the full 2,500,000). Their currency conversion is shown also.

1. Is this coupon taxable since it lowered the amount I even needed to send to get the SAME USD amount (and the fee was ZERO?) And it was able to lower the actual payment amount and not just the fee (since it was 0)?

2. Are the other two 3,000 Korean Won sign-up coupons that I haven't used also taxable?

3. Or, are none of these taxable because even though I am being allowed to pay less, this is the company's own choice to sell the currency at a lower/discounted rate even lower than their currency conversion rate shown (since it's discounted after that rate is used to calculate it)?

Not familiar with this, sorry. Thanks in advance!

1,000,000 Korean Won Example (0 Fee, Coupon Still Works)Transaction showing amount, 0 fee, coupon, and total payable for same USD

[pk]

@shanesnh  What I get from your post is whether these discounts ( discounted  exchange rate  -- South Korean Won to US$ ) for monies  amount to recognizable  income for US tax purposes.  In such cases  the tests I would apply are 

(a) is this something of value that I have full / unfettered right to transfer ( i.e.  sell/exchange/barter) in the open market ( i.e. arms length exchange) ?  If it is not then it is not a recognizable income.

(b) If it is a recognizable income is it above the minimal / safe harbor amount generally recognized ?

In your particular situation, your operating currency ( for US tax purposes ) being US$, an exchange rate discount based on specific conditions ( opening a new account, specific currencies, relationship etc. etc. ) are not transferrable ( it applies only to a long-term customer and/or holder of a specific coupon -- an advertisement ) and so therefore is not an income per-se -- it is a benefit of being a special customer ( relationship).   This is no different  than getting special pricing in a membership only store like  Costco/ Sam's Club etc.

(c) This is personal expense -- exchanging Won to US$

Please note that since you have foreign bank/ financial account, FBAR and FATCA regulations apply

Does this make sense ?   Is there more I can do for you ?

[shanesnh]

Thanks @pk 

So, even though it wasn't really a discounted exchange rate (the rate displayed the same but the effective cost was lowered by the coupon amount), would it likely not be taxable? 

Like I said, I assumed that the coupons were only good towards the fees that the site (WireBarley) charges but they charge no fee if you send over 1 million Korean Won or more at a time. 

But the coupon actually lets you lower the amount you even need to send them for the transaction (so 1 million KRW becomes 990,000 KRW with a 10,000 KRW referral coupon). 

So, even though I put in that I want to transfer 2,500,000 KRW to USD, it only made me pay/send 2,490,000 KRW because of the coupon so I basically got either a 10,000 KRW discount on the transaction or 10,000 KRW for free but not sure which one is correct.