Capital Loss foreign shares and forex

Discussion in 'Stocks & Derivatives' started by Revils, Apr 15, 2015.

  1. Revils

    Revils Well-Known Member Silver Stacker

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    Hi All,

    I'm wondering how to work out capital loss for some foreign shares. I know how much I bought and sold in USD, but not what I need to work out in terms of exchange gains/losses or what I can claim.

    To simplify, and for anonymity, I've scaled everything so this isn't the actual amount.

    1) 23/02/15 Transferred $10,000 AUD to optionsxpress. Exchange rate on this day was .785
    2) 25/02/15 Received confirmation and notification that $7757 USD available to trade. Exchange rate on this day was .781
    3) 26/02/15 Bought 54 shares of ZYX @ 71.87 ; $3880.98USD. Exchange rate on this day was .789
    4) 31/03/15 Sold 54 shares of ZYX @ 69.02 ; $3727.01USD. Exchange rate on this day was .765

    So I made a loss of $162.97USD, which on the day would be $213.03AUD however this doesn't take into account exchange when I bought it or transferred the money.
    So question is do I say my loss was $46.95AUD because this is the amount I paid if converted to AUD on the 26/02 minus the amount I sold for converted to AUD on the 31/03 (4918.86 - 4871.91)
    And can I claim a percent of the exchange rate loss as costs associated with this trade?

    Any advice would be appreciated.
     
    Revils, Apr 15, 2015
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  2. phrenzy

    phrenzy In Memoriam - July 2017 Silver Stacker

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    I could be wrong and don't quote me on it but I believe the profit our loss is booked when you bring the money home. Because there is still a forex trade to happen which could affect the outcome.
    When a profit or loss is made and the money isn't repatriated (i.e your sale is settled in USD into a US account and left there) then I'm not sure, the exchange rate at the time of the trade or at the last day if the financial year would both be logical but I really don't know.
     
    phrenzy, Apr 15, 2015
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  3. Revils

    Revils Well-Known Member Silver Stacker

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    Thing is I don't plan to repatriate that USD, certainly not any time soon. I've already used the majority of it to buy other (US denominated) shares too
     
    Revils, Apr 15, 2015
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  4. whinfell

    whinfell Well-Known Member Silver Stacker

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    I know there are some stackers with tax/accountancy experience on the forum, so it would be good to hear from them, but my thoughts are the ATO would treat this as two separate events as follows.

    1. Gain/loss on sale of shares - you'd calculate the gain/loss in Australian dollars, using the figures in 3) and 4) above (don't forget to include brokerage costs).

    2. Gain/loss on forex - you'd need to wait until you repatriate the USD, i.e. a separate tax event, possibly in a different financial year.

    But I could be totally off the mark!
     
    whinfell, Apr 15, 2015
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