FX Tax Reporting with Interactive Brokers

JamesBonds · Sep 22, 2019

Only threads I found were very old--can someone enlighten me how to calculate FX gains or losses with Interactive Brokers for U.S. tax reporting? This is for a portfolio that holds foreign stocks, either borrowing the currency or converting into it (with FX spot transactions back and forth).

It appears the Interactive Brokers "FX Income Worksheet" may not be correct for U.S. tax purposes because it includes FX moves that are already reflected in the USD cost basis of the stocks themselves (for 1099-B)?

sprstpd · Sep 23, 2019

JamesBonds said:
Only threads I found were very old--can someone enlighten me how to calculate FX gains or losses with Interactive Brokers for U.S. tax reporting? This is for a portfolio that holds foreign stocks, either borrowing the currency or converting into it (with FX spot transactions back and forth).

It appears the Interactive Brokers "FX Income Worksheet" may not be correct for U.S. tax purposes because it includes FX moves that are already reflected in the USD cost basis of the stocks themselves (for 1099-B)?

In my experience, the FX Income Worksheet has been spot on except for one instance which still has an outstanding ticket at IB for more than a year. Make sure you understand what actions result in an FX reportable transaction for tax purposes before you declare IB's worksheet erroneous.

MoreLeverage · Sep 23, 2019

sprstpd said:
In my experience, the FX Income Worksheet has been spot on except for one instance which still has an outstanding ticket at IB for more than a year.

What’s that one instance, in case we should be aware of it?

sprstpd · Sep 24, 2019

MoreLeverage said:
What’s that one instance, in case we should be aware of it?

It involves the difference in FX translation between the trade date and the settlement date of a foreign stock transaction and it only amounts to a few dollars. However, I wrote my own program to double check IB's FX Income Worksheet and everything matches except this one entry. And when I look at it manually, I don't see how IB is correct in this instance. It is possible that because part of the FX translation happens from a stock that I purchased many years ago, IB does not track the FX translation of trade date vs. settlement date correctly beyond a certain time window. I'm just guessing because no one at IB ever answers the ticket.