If I exchange a foreign currency to US dollars for over $25,000.00. Will I be responsible for any taxes?

Asked over 1 year ago - Springfield, MO

I exchanged US dollars for this foreign currency when it was real low. now it's exchange rates is much higher.

Attorney answers (3)

  1. Bruce Givner

    Pro

    Contributor Level 18

    5

    Lawyers agree

    Answered . A gain on a currency exchange is taxable like the gain on the sale of any other asset.

  2. Houston Putnam Lowry

    Contributor Level 10

    3

    Lawyers agree

    Answered . The short answer is yes.

    You bought the currency when the exchange rates were low (meaning you got a lot of foreign currency for $25,000). Now the rates have changed, so you would get more than $25,000 if you converted the foreign currency back to dollars.

    This means you would have a gain and would have to pay taxes on the gain (once it happens, assuming you are a cash basis taxpayer).

    Speak to your accountant.

    I am admitted to practice in Connecticut and limit my responses to CT law.
  3. Luca Cristiano Maria Melchionna

    Contributor Level 15

    2

    Lawyers agree

    Answered . Yes, you are. Please talk to an international attorney for this. Best

    This reply is offered for educational purpose only. You should seek the advice of an attorney. The response given... more

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