I am having issues determining if I need to declare gains or losses on my taxes.
Suppose I had $500 and converted to Brazilian reals at the rate 1 to 2, so R$1000 and with that money I bought some investment X. After a couple of years investment X is worth R$1300 but currency is now 1 to 3, so while I make R$300, when I bring it back to the U.S. I actually have only less than $430.
i.e. I lost in net, but the investment have me positive results in another currency. For taxes, is this a capital loss or a capital gain?