I'm trying to understand how taxes work when dealing with different currencies, like in Etoro for EU users. I live in Spain and a few years back, I put some money into my Etoro account. It was originally in euros and got converted to dollars. I started buying and selling stocks in the US markets. When it came to taxes, I reported all profits and losses using the 'buy' and'sell' values, but expressed in euros at the time, since that's my country's currency. So far so good.
My confusion now is about taxes when I want to withdraw my money and convert it back to euros. Let's say I initially put 10000 euros in, and back then 1 usd = 1 eur, so I had 10000 dollars. Over time, my money doubled due to my trades, so now I have 20000 dollars and I've reported my profits yearly. This year, I want to take all my funds back and convert to euros, but now 1 usd = 1.5 eur, so after conversion, I get 20000 * 1.5 = 30000 euros.
I'm wondering how much profit I need to report due to the different conversion rate. This year, my profit might be 5000 euros since the original 10000 euros turned into 15000 with the new conversion rate, while the other 15000 euro profits don't count as they were from trades already reported in previous years. Or maybe it works differently?
My confusion now is about taxes when I want to withdraw my money and convert it back to euros. Let's say I initially put 10000 euros in, and back then 1 usd = 1 eur, so I had 10000 dollars. Over time, my money doubled due to my trades, so now I have 20000 dollars and I've reported my profits yearly. This year, I want to take all my funds back and convert to euros, but now 1 usd = 1.5 eur, so after conversion, I get 20000 * 1.5 = 30000 euros.
I'm wondering how much profit I need to report due to the different conversion rate. This year, my profit might be 5000 euros since the original 10000 euros turned into 15000 with the new conversion rate, while the other 15000 euro profits don't count as they were from trades already reported in previous years. Or maybe it works differently?
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