Читать книгу International Taxation - Adnan Islam - Страница 67

R. Smith, a U.S. citizen, converted $20,000 into Swiss francs at a time when the exchange rate of Swiss francs to U.S. dollars was 0.33. The 60,000 francs were deposited in a Swiss bank. One year later, when the exchange rate of francs to dollars was 0.25, Smith had not converted the 60,000 francs into other property; therefore, no loss is recognized. If the funds had been converted to U.S. dollars or any property distinguishable from a bank deposit, the loss would be recognized.

Foreign currency gain means any gain from a Section 988 transaction to the extent such gain does not exceed the gain realized because of changes in exchange rates on or after the booking date and before the payment date. A foreign currency loss means any loss from a Section 988 transaction to the extent that such loss does not exceed the loss realized because of changes in the exchange rates on or after the booking date and before the payment date. The booking date is (a) the date of acquisition, (b) the date on which the taxpayer becomes obligor, (c) the date on which an item is accrued or otherwise considered, or (d) the date a position is entered into or acquired. The payment date is the date on which payment is made or received or the date the taxpayer’s rights with respect to the position are terminated.