Hi, I've bought a Certificate of Deposit in a foreign account and had losses due to currency devaluation during the time I held it, can I report this as a capital loss?

Answer

No, do not report it as a capital loss, but as a loss of income per the below:

Yes, you can report your loss on your foreign currency conversion by following the steps below:

  1. Select Personal taxes
  2. Select Wages & income
  3. Select I'll choose what I work on
  4. Scroll to the section Less common income
  5. Select the line that reads Misc income 1099-A 1099-C
  6. Select the line Other Reportable Income

You will then add an item titled "Loss on foreign currency transactions." and enter the loss as a negative amount.

You may use the average exchange rate of 2015 or the exchange rate on the date you changed the money.

http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates

http://www.oanda.com/currency/historical-rates/


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