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But supposing

a) I do not convert the currency on the date of the sale, but do so after a few days during which the dollar appreciates. Not my foreign currency buys less dollars than on my original sale date. How do I report the loss?

Whether or not you ever convert the currency is irrelevant for US tax purposes. For tax purposes you must calculate the transaction as if you made the currency conversion on the date of the transaction.

b) I do not convert the currency on the date of the sale, but I buy new shares in foreign currency. How do I calculate my new cost basis? The reason I ask this is because, I haven't really converted my GBP to USD. Also, the USD-GBP exchange rate and the GBP-USD exchange rate usually is different. So on the date of the sale, for my first transaction, say I used the GBP-USD rate to calculate my total profit/loss. Now when I reinvest the shares, what rate do I use to calculate my tax basis?

The instructions for Form 1116 should be the starting point for answering your questions. I don't believe the official USD-GBP and GBP-USD exchange rates differ enough to matter, since the official rates don't include fees for conversion. In any case, I would be using the GBP>USD exchange rate as the investment in GBP is fixed and known and you're trying to determine the USD equivalent of the amount.

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