Stock Trades in Euro

[Monty]

I have a client that bought a stock in Euro in two purchases over time. They sold the stock several years later. How do you calculate the gain or loss? Do I need to convert each puchase to US dollars at the exchange rate at the time and convert the sale price at the converation rate at the sale date? Or do I just calculate the gain or loss in Euro and then convert it to USD at the sales date conversion rate?

[George4Tacks]

Door #1. Compute actual $ cost basis and actual $ sales price.  

[Monty]

Whats behind door number 2?

Can you use the Euro's and convert at the end or take an average exchange rate?

Thanks

[George4Tacks · Accepted solution]

I am rejecting Door #2 "Or do I just calculate the gain or loss in Euro and then convert it to USD at the sales date conversion rate?" 

I do so because that would ignore any gain or loss involved in exchange rate.

How much did the invest cost in US $. How much was the sales price in US $. That difference would be the gain to report on the US tax return.