Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0

Last year I have sold some stocks through my German brokerage in a transaction that was denominated in Euro currency.

For myself I have computed the USD cost basis and sales prices for each such sale using the exchange rates (for purchase date and sales date respectively) from the Federal Reserve website.

My German broker supplied me with 1099-B forms that showed slightly different sales prices, presumably because they used a different source for the currency rate. They did not report the cost basis. I don't know which source my broker used for the exchange rate, so I can't get a comparable exchange rate for the purchase date.

Here's a (fictitious) example of one transaction:
- I compute the sales price to $4000 and the cost basis to $3000 using the Federal Reserve exchange rates.
- My 1099-B shows a sales price of $3950 and no cost basis is reported

I'm assuming that I should treat all such transactions the same way for a given tax year (and perhaps even across multiple tax years).

I see three possible ways to report this:

1. Report the sales price as $3950 and the cost basis as $3000 for a cap gain of $950.

2. Report the sales price as $3950 and the cost basis as $2950 for a cap gain of $1000, which is what I calculated for myself.

3. If either of the above method is fine and it's okay to use different methods in different years, run the numbers across all stocks sales for method #1 and method #2 and pick the method that gives me the smallest gain / largest loss. (Sounds a bit fishy, but if it's permissible, I would do it).

How should I proceed on this?

Thanks so much for and advice,
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.