Investing proceeds from foreign vacation home sale

We bought a vacation home in the UK in 2006 for 182000 pounds, including purchase price, closing costs and improvements, when the pound was stronger (\$1.8/pound), and wired \$327000 directly to the UK solicitor.

If we sell the vacation home in 2018 for 182000 pounds, when the rate is \$1.3/pound, place the funds into a UK interest-bearing account for several years until the pound improves to \$1.5/pound, and return the funds to the US at that time, do we calculate the gain/loss on currency exchange as (182000 x \$1.5/pound) - (182000 x \$1.8) = \$273000 - \$327000 for a loss of \$54000, or as (182000 x \$1.5/pound) - (182000 x \$1.3/pound) = \$273000 - \$237000 for a gain of \$36000? In the first case we use the exchange rate of \$1.8/pound when we first changed dollars into pounds in 2006. In the second case we use the rate of \$1.3/pound when we opened the interest-bearing account in 2018.

• Are you asking about the UK tax impact or the US tax impact? Commented Jun 10, 2018 at 18:47
• For the opposite way around (see this question) there would be a taxable event when you sold (calculated using the 1.8 and 1.3 rates) and potentially a second event when you rehomed the money (using 1.3 and 1.5). Also, is it really the case that the selling price (in £) is the same as you bought it for? I would have expected a higher sale value in many places. Commented Jul 26, 2018 at 8:52
• " for several years until the pound improves to \$1.5/pound" for a suitable (ie really big) value of 'several'... Commented Jul 26, 2018 at 10:42
• UK house prices have moved significantly upwards in the last 12 years, is that sale price realistic? It will change your question substantially if there's a high enough price gain to outweigh the currency losses. Commented Aug 5, 2018 at 11:07