# IRS: translating to dollars



## cescolar (May 31, 2013)

When you sell a foreign good, to calculate the cost basis and the sale price you need to translate the local currency to dollars, as of the day of the purchase and sale.

Is that right?

I know that you can defer capital gains by making an installment sale - you defer capital gains by taking payments from a buyer over a period of years. 

But if you sell at a loss and make an installment sale, can you claim the loss calculating the dollar price as of the day of the sale, or do you need to calculate the loss on every payment?


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## Bevdeforges (Nov 16, 2007)

Take a look at Publication 537 for all you want to know (or not) about installment sales. Publication 537 (2012), Installment Sales

But take a look at the General Rules section. 



> *Sale at a loss.* If your sale results in a loss, you cannot use the installment method. If the loss is on an installment sale of business or investment property, you can deduct it only in the tax year of sale.


Generally, when converting values to US$, you're supposed to convert the relevant figures related to the basis of the property at the exchange rate on the date that you acquired the property. And then the selling price at the exchange rate on the date of the sale. (It means you wind up having to account for exchange gain or loss as part of the sale.)
Cheers,
Bev


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## cescolar (May 31, 2013)

Thanks, Bev! As usual you are really helpful!

I now have a currency loss, but that will be paid over time. I wanted to make sure that the IRS was going to let me take it now. If they forced me to use the installment method, some years I might have a loss, others not (if the currency loss were to reverse itself)!


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