I called the IRS today (12/30/11) and after being on hold for almost an hour I was able to speak to an agent.
This was my intial question: If I purchase foreign currency here in the US and it revalues and I exchange, do I report the increase and if so, what form do I use?
I explained that Form 8938 did not seem appropriate for the situation.
We clarified around the question until she understood that it really was worded the way I wanted to ask it.
After being on hold for awhile she finally returned to let me know that there is apparently no separate Form for this situation (as it is not foreign asset held or purchased in foreign country). She said that this would be a rate gain due under code section #988.
See Form #988 info:
In addition, as I continued to probe and push for further clarification, she said that my question / situation was 'beyond anyone's level of training ' (at the IRS number) and that I had the option of writing to the service center where I would normally file … at which time I let her know that I was not a professional. She said that I would have to be a paid professional preparer/filer to write to the service center. She suggested that I contact my professional and pay/ask them to inquire.
I pushed a little more and said that if the person I speak with is unable to answer my question, I would normally ask for the supervisor and go up the chain of command until I got to someone knowledgeable. I asked if this is possible here at this number. She again stated her apologies that the IRS is not funded for and does not train that deeply and they have no resources with which to find the answer to my question. She said it is 'out of scope' and 'beyond their level of services' to answer this.
So. There ya have it. Your professional will have to write and get an answer to this one.
Here is another link to Code:Sec 988 that is a little easier on the eyes:
Last edited by Mona Lisa; 12-30-2011 at 10:03 PM.
If you think today is good, just wait til tomorrow!!