How does one book a currency exchange loss?
- I have an account in GBP.
- I have an account in USD.
- I pay taxes in USA.
Let's assume following transactions:
- I made 100k GBP in the beginning of 2016 and booked it at 150k USD.
- I converted 100k GBP to USD at the end of 2016 and received 125k USD.
Tax time is there so let's assume:
- I pay 25% taxes on income. That's 25% of 150k USD.
- How do I book the loss of 25k USD because of currency conversion?
- What if I only converted 50k GBP at the end of 2016?