Tax implications - moving money UK to USA
Jan 23rd 2014, 6:56 pm
#17
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Re: Tax implications - moving money UK to USA
Depending on when you do it, if he becomes US tax resident and then later on moves his money over, there may be a capital gain/loss.
Jan 23rd 2014, 7:33 pm
#19
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Re: Tax implications - moving money UK to USA
I don't understand. Suppose I have a savings account in the account that has been accumulated over several years. I move to the USA and a few weeks later I move that money over. I haven't used $ to buy those GBP in my savings account so I don't believe I have made a Forex gain or loss when I transfer the money over.
Jan 23rd 2014, 7:39 pm
#20
Joined: Dec 2001
Location: Dixie, ex UK
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Re: Tax implications - moving money UK to USA
I don't understand. Suppose I have a savings account in the account that has been accumulated over several years. I move to the USA and a few weeks later I move that money over. I haven't used $ to buy those GBP in my savings account so I don't believe I have made a Forex gain or loss when I transfer the money over.
Jan 23rd 2014, 7:46 pm
#21
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Re: Tax implications - moving money UK to USA
Also, in addition to the FBAR, don't forget IRS Form 8938 about foreign assets if you exceed the thresholds.
Jan 23rd 2014, 7:47 pm
#22
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Re: Tax implications - moving money UK to USA
I think the argument would be that you "acquired" the GBP on the day you became US tax resident, and so the movement since then would be your gain or loss. I am certain that very few people even think about such an esoteric calculation, and fewer still declare it on their tax return.
Jan 24th 2014, 12:55 pm
#23
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Re: Tax implications - moving money UK to USA
An individual signs a return under penalties of perjury that it is complete; so as nun has noted, if a gain over $200 was omitted a return would be incomplete. This is not a good position especially if one is filing an 8938 because the statute of limitations now does not close if income from foreign assets is not fully disclosed.
Jan 24th 2014, 1:48 pm
#24
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Re: Tax implications - moving money UK to USA
Losses are non-deductible personal losses under Internal Revenue Code section 165(c). Section 988(e)(2) requires foreign currency gains attributable to personal transactions to be recognized if in excess of $200.
An individual signs a return under penalties of perjury that it is complete; so as nun has noted, if a gain over $200 was omitted a return would be incomplete. This is not a good position especially if one is filing an 8938 because the statute of limitations now does not close if income from foreign assets is not fully disclosed.
An individual signs a return under penalties of perjury that it is complete; so as nun has noted, if a gain over $200 was omitted a return would be incomplete. This is not a good position especially if one is filing an 8938 because the statute of limitations now does not close if income from foreign assets is not fully disclosed.
Jan 24th 2014, 1:52 pm
#26
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Re: Tax implications - moving money UK to USA
Losses are non-deductible personal losses under Internal Revenue Code section 165(c). Section 988(e)(2) requires foreign currency gains attributable to personal transactions to be recognized if in excess of $200.
An individual signs a return under penalties of perjury that it is complete; so as nun has noted, if a gain over $200 was omitted a return would be incomplete. This is not a good position especially if one is filing an 8938 because the statute of limitations now does not close if income from foreign assets is not fully disclosed.
An individual signs a return under penalties of perjury that it is complete; so as nun has noted, if a gain over $200 was omitted a return would be incomplete. This is not a good position especially if one is filing an 8938 because the statute of limitations now does not close if income from foreign assets is not fully disclosed.
Jan 24th 2014, 2:03 pm
#27
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Joined: Apr 2004
Posts: 34,649
Re: Tax implications - moving money UK to USA
Leaving aside theoretical discussion, exactly how many people have ever been audited, still less penalized, for anything related to this?
"Penalty of perjury" means you believed your tax return was correct when you signed it. And while in theory the statute of limitations can be extended to 6 years if more than $5000 of specified foreign income is omitted, in practice it is highly unusual for the IRS to seek to go back beyond 3 years.
It's understood at disposal of significant amounts of foreign currency, as a capital asset, may create a capital gain or loss. But has the IRS ever asked a single person about whether there are exchange rate gains or losses on small scale personal transactions. Without any of this context, a thread like this can easily evolve into scaremongering.
"Penalty of perjury" means you believed your tax return was correct when you signed it. And while in theory the statute of limitations can be extended to 6 years if more than $5000 of specified foreign income is omitted, in practice it is highly unusual for the IRS to seek to go back beyond 3 years.
It's understood at disposal of significant amounts of foreign currency, as a capital asset, may create a capital gain or loss. But has the IRS ever asked a single person about whether there are exchange rate gains or losses on small scale personal transactions. Without any of this context, a thread like this can easily evolve into scaremongering.
Last edited by JAJ; Jan 24th 2014 at 2:16 pm.
Jan 24th 2014, 2:36 pm
#28
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Re: Tax implications - moving money UK to USA
Leaving aside theoretical discussion, exactly how many people have ever been audited, still less penalized, for anything related to this?
"Penalty of perjury" means you believed your tax return was correct when you signed it. And while in theory the statute of limitations can be extended to 6 years if more than $5000 of specified foreign income is omitted, in practice it is highly unusual for the IRS to seek to go back beyond 3 years.
It's understood at disposal of significant amounts of foreign currency, as a capital asset, may create a capital gain or loss. But has the IRS ever asked a single person about whether there are exchange rate gains or losses on small scale personal transactions. Without any of this context, a thread like this can easily evolve into scaremongering.
"Penalty of perjury" means you believed your tax return was correct when you signed it. And while in theory the statute of limitations can be extended to 6 years if more than $5000 of specified foreign income is omitted, in practice it is highly unusual for the IRS to seek to go back beyond 3 years.
It's understood at disposal of significant amounts of foreign currency, as a capital asset, may create a capital gain or loss. But has the IRS ever asked a single person about whether there are exchange rate gains or losses on small scale personal transactions. Without any of this context, a thread like this can easily evolve into scaremongering.
Jan 29th 2014, 1:30 am
#29
Joined: Dec 2001
Location: Dixie, ex UK
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Re: Tax implications - moving money UK to USA
Leaving aside theoretical discussion, exactly how many people have ever been audited, still less penalized, for anything related to this?
"Penalty of perjury" means you believed your tax return was correct when you signed it. And while in theory the statute of limitations can be extended to 6 years if more than $5000 of specified foreign income is omitted, in practice it is highly unusual for the IRS to seek to go back beyond 3 years.
It's understood at disposal of significant amounts of foreign currency, as a capital asset, may create a capital gain or loss. But has the IRS ever asked a single person about whether there are exchange rate gains or losses on small scale personal transactions. Without any of this context, a thread like this can easily evolve into scaremongering.
"Penalty of perjury" means you believed your tax return was correct when you signed it. And while in theory the statute of limitations can be extended to 6 years if more than $5000 of specified foreign income is omitted, in practice it is highly unusual for the IRS to seek to go back beyond 3 years.
It's understood at disposal of significant amounts of foreign currency, as a capital asset, may create a capital gain or loss. But has the IRS ever asked a single person about whether there are exchange rate gains or losses on small scale personal transactions. Without any of this context, a thread like this can easily evolve into scaremongering.
.... It was also 12 years ago! 
Last edited by Pulaski; Jan 29th 2014 at 1:39 am.
Jan 29th 2014, 4:23 pm
#30
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Re: Tax implications - moving money UK to USA
I'm trying to collate advice/info in this thread with that in:
http://britishexpats.com/forum/showthread.php?t=823097
(Hope that's not mixing oil with water)
But it seems to mean that using the average IRS exchange rate - which might give one a fictitious loss or gain (which does not conform to what actually occured) - does not matter.......or have I just mixed oil with water?
http://britishexpats.com/forum/showthread.php?t=823097
(Hope that's not mixing oil with water)
But it seems to mean that using the average IRS exchange rate - which might give one a fictitious loss or gain (which does not conform to what actually occured) - does not matter.......or have I just mixed oil with water?
