bobxyz999[at]yahoo.com (Bob Brown) asks:

- quote -

If I understand this correctly:

1) There is no currency gain/loss at the time of the
initial transaction because it's part of the cost of
the transaction.

2) Upon remittance to Australia, the capital gain/loss
and the foreign exchange gain/loss are recognized.

3) Now we come to the tricky part. You have a captial
gain sitting in a brokerage account and tax gang in
OZ wants their piece of the action.
a) Capital gain/loss occured upon exiting a transaction.
So it is measured as gain/loss of exit less entry.
b) Because you did not remit to Australia, there is no
foreign exchange gain/loss.

I hope that's right.

Dick

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Does anyone know how an Australian taxpayer would calculate
capital gains/losses arising from a US brokerage account
denominated in US dollars?

Presumably there would be the potential for currency
gains/losses as well as trading gains/losses.

According to the Australian Tax Office web site, all foreign
income is converted to Australian dollars at the exchange
rate that applied at the time the income was remitted to
Australia, or if not remitted, at the end of the financial
year. OK, that sounds simple enough as far as the the trading
gains/losses are concerned. I guess all capital gains
calculations would be carried out in US dollars, then converted
into Australian dollars at the appropriate rate as a final step.

But how about curreny gains/losses? Does buying shares
in US dollars constitute disposal of foreign currency and
therefore a CGT event? In other words, would a currency capital
gain/loss occur each time shares were bought, or only when
US dollars were eventually converted into Australian dollars?

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