— U.S. Citizen Abroad (@USCitizenAbroad) July 16, 2013
Introductory thought 1:
Based on current tax law, for Americans living abroad, currency fluctuations create U.S. dollar capital gains or losses even on daily transactions as well as on movements of short and long term investments done in local currencies. The exchange rate on the purchase date and the exchange rate on the sale date determine the capital gain for the U.S. Treasury.
Introductory thought 2:
We all know that US tax liability is computed in US dollars. We also know that exchange rates can play in rule in creating profits and losses. It would be interesting for people to comment on their experiences with how changes in exchange rates have created “phantom gains” for them. I think this could be very helpful evidence in working on how to get this whole thing (citizenship-based taxation) reversed. So, if anybody is reading this, please comment on your experiences.
In addition, the issue of exchange rates and a falling US dollar is extremely important on this issue of expatriation? Why?
As the US dollar falls, almost everybody will become a “covered expatriate”. That two million dollars will seem like nothing.
Obviously this is one more reason why you need to get on with the job, painful as it is, of expatriation and freeing yourself from this nightmare!
Since the election of Barack Obama the world has been introduced to two new sports/games.