Section 988 Loss

A section 988 transaction relates to section 988 c 1 of the.

Section 988 loss. The term foreign currency loss means any loss from a section 988 transaction to the extent such loss does not exceed the loss realized by reason of changes in exchange rates on or after the booking date and before the payment date. Irc section 988 is a tax regulation governing capital losses or gains on investments held in a foreign nonfunctional currency. The term foreign currency loss means any loss from a section 988 transaction to the extent such loss does not exceed the loss realized by reason of changes in exchange rates on or after the booking date and before the payment date.

Under section 988 a foreign currency gain is any gain from a section 988 transaction to the extent the gain doesn t exceed gain realized because of changes in exchange rates on or after the booking date and before the payment date. 3 special rule for certain contracts etc. A loss from a foreign currency transaction under internal revenue code section 988 is a loss transaction if the gross amount of the loss is at least 50 000 in a single tax year for individuals or trusts whether or not the loss flows through from an s corporation or partnership.

Section 988 taxes forex gains and losses like ordinary income which is at a higher rate than the capital gains tax for most earners. 988 b 3 special rule for certain contracts etc.