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I am a US and French citizen and have bank accounts in both countries. One of my friends is a Permanent Resident in the US and also has French citizenship, with bank accounts in both countries.

I have a need for US Dollars, whereas he has a need for Euros. If I transfer EUR 20,000 from my French account to his French account, and he transfers the spot price equivalent (let's say USD 25,000) from his US account to my US account, are there any tax implications for him or for me, as we're simply exchanging the equivalent value in different currency (no profit)?

Are there any specific forms or agreements that we would need to fill-in or execute to document this transaction?

Thanks

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There are no tax implications for converting currency. If you use currency conversions as part of investment, then there would be, but in your scenario there are none.

  • This presumes the transaction takes place at a reasonable exchange rate, of course. If either party makes a real profit on the deal, that profit is taxable income. – keshlam Dec 30 '14 at 4:56
  • @keshlam the op was quite clear on that point. – littleadv Dec 30 '14 at 5:59
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    @Beefie why are you worried about gift? Gift is when you give something without getting anything in return. Don't overthink it. – littleadv Dec 30 '14 at 18:17
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    @Beefie if you want to reassure and sleep better - just keep the bank receipts for both the transfers. If anyone asks - you can show that it was an exchange at the spot rate and nothing more. – littleadv Dec 30 '14 at 18:28
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    @ilya if anyone asks that would be FinCEN, not the IRS. – littleadv Sep 24 '15 at 7:46

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