I am an American and pay taxes in US dollars. I have some holdings in another currency, for instance, the Euro. Obviously the funds have never been repatriated but this lack of tax event is messing with my accounting.
From my basic understanding, the tax event would be long or short term capital gains solely based on my initial entry into the foreign currency, and then how many dollars I have when I liquidate that foreign currency. Simple enough.
This starts becoming complicated for me when I am also invested in shares of companies denominated in this currency. The trades and investing has been largely successful, but is it such an absolute that there is no US tax event for these foreign denominated trades?
We can ignore PFIC regulations for this question. I am only concerned about income tax, capital gains tax and dividend withholding for the US jurisdiction.
The way I understand it right now, the only tax event is the one that occurs when I liquidate the financial products AND bring the proceeds back to my US accounts, and where new total is more than what I began with (capital gain).
And all of this is compounded by the fluctuations in the exchange rate. I feel like I can't even estimate my taxes if I wanted to. So I can't be the only one that has ever faced this dilemma, I have no need to actually realize capital gains or repatriate, so are there accepted guidelines