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A gain on a personal foreign currency will be recognized if transaction occurred. If the gain is less than $200 - it will not be a taxable income (see IRS publication 525 page 33 for reference - http://www.irs.gov/pub/irs-pdf/p525.pdf).
The gain more than $200 is reported as capital gain
Let me know if you need help with reporting.
Is there a Foreign Currency Exchange tax when the exchange takes place in the US?
There is no any transaction tax on the currency exchange and it doesn't matter where - in the US or abroad the exchange took place.
I am not aware of any clear determination if the currency conversion gains may be treated as long term capital gains.
My assumption is that the foreign currency is a capital asset and depending on the time of transaction you may use long term capital gain rate.
If the currency was held less than a year - that will be short term gain - taxable as your regular income - most likely at 35% tax rate.
My assumption is - if you kept the currency more than a year - you may report the gain as long term capital gain - taxable at 15%. But there is no clear indication if any IRS document if we may or may not use that rate for currency conversion gains.
With such large amount - you likely will trigger AMT.
25% and 28% rates on capital gains are not applicable to this situation. - http://www.irs.gov/taxtopics/tc409.html