U.S. Taxation of Foreign Currency Transactions: A View from Traders' and Hedgers' Perspectives

Tannenbaum, Elliot, The CPA Journal

Over the past several years, new tax laws and regulations have provided guidance that has significantly clarified the taxation of foreign currency transactions. Prior to this, U.S. taxation of many of these transactions was, at best, unclear. While the laws and underlying regulations have gone a long way towards providing necessary guidance, foreign currency traders and hedgers (e.g., multinational U.S. corporations) must work their way through complex rules. The following example provides an overview of the U.S. tax consequences to both foreign currency traders and hedgers entering into a foreign exchange forward contract.

Example: On September 30, 1991, a U.S. multinational …

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Publication information: Article title: U.S. Taxation of Foreign Currency Transactions: A View from Traders' and Hedgers' Perspectives. Contributors: Tannenbaum, Elliot - Author. Magazine title: The CPA Journal. Volume: 61. Issue: 9 Publication date: September 1991. Page number: 76+. © New York State Society of Certified Public Accountants Feb 2009. Provided by ProQuest LLC. All Rights Reserved.

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