Hi, there!
disclaimer: I am not an accountant and I just learned about the Section 988
gains after I have read your post. But I thought that this may be related
to the sing_curr_conv
<https://github.com/Ev2geny/evbeantools/blob/main/docs/sing_curr_conv.md>which
I created.
As far as I see, what you recorded makes sense. But I am just thinking that
the issue here is that you try to combine a simple transaction record as
well as post transaction tax analytics in one place.
In a real world (personal or corporate) this would not be in one place. In
a corporate world some corporation would just go around doing business in a
local currency and then some specially trained person would then do some
clever analytics to calculate the exchange -rate fluctuation - related
gains in a functional currency. And this analytics would also depend on
the on the source of exchange rate the person uses (so a bit subjective
thing)
I think the best way to use beancount is to do the same: you just record
transactions they way you did them, and then you do a later analytics to
calculate all the difficult to calculate gains. May be you even outsource
this to somebody else.
I am sorry I do not have straight answer to your question, but I will think
how I would approach this.
On Wednesday, March 11, 2026 at 11:29:34 AM UTC+1 SomeCallMeTim wrote:
> I’ve been working on a pattern to track:
>
> * EUR cash lots with USD basis (for U.S. section 988-style FX gain/loss)
> * A stock traded in EUR, with cost basis in EUR (not USD)
> * Capital gains in both EUR and USD for tax reporting
> * FX gain only when EUR is actually disposed (when a stock is bought with
> EUR, or when a EUR to USD conversion occurs)
>
> I’d really appreciate feedback on whether this is idiomatic Beancount and
> if there are cleaner ways to express the same economics.
>
> Below is a complete, runnable example with prices/rates chosen to keep the
> math simple. I’d love any feedback on more elegant patterns, potential
> pitfalls, or ways to simplify this while still keeping explicit EUR lots,
> EUR-based stock cost, and U.S. tax reporting needs (section 988-style FX
> plus capital gains in both currencies).
>
> option "operating_currency" "USD"
>
> 1970-01-01 open Assets:US:Checking
> 1970-01-01 open Assets:EU:Checking
> 1970-01-01 open Assets:IBKR:BVME:IMBL
> name: "Internazionale Imobiliare - Milan Exchange"
> 1970-01-01 open Income:US:FX:Sec988
> 1970-01-01 open Income:CapGains:USD
> 1970-01-01 open Income:CapGains:EUR
> 1970-01-01 open Equity:Tax:CapGains:Bridge
> 1970-01-01 open Equity:Opening-Balances
>
> ; ----------------------------------------------------------------------
> ; EUR/USD Price Table
> ; ----------------------------------------------------------------------
>
> 2026-02-01 price EUR 1.20 USD
> 2026-03-01 price EUR 1.15 USD
> 2026-04-01 price EUR 1.25 USD
> 2026-05-01 price EUR 1.30 USD
> 2026-06-01 price EUR 1.40 USD
>
> ; ----------------------------------------------------------------------
> ; Initial funding in USD
> ; ----------------------------------------------------------------------
>
> 2026-01-01 * "Initial funding of US Checking"
> Assets:US:Checking 5000.00 USD
> Equity:Opening-Balances -5000.00 USD
>
> ; ----------------------------------------------------------------------
> ; Buy EUR in two lots (these EUR lots later fund the IMBL buy)
> ; Lot 1: 500 EUR for 600 USD -> 1.20 USD/EUR
> ; Lot 2: 500 EUR for 575 USD -> 1.15 USD/EUR
> ; Combined EUR basis: 1175 USD
> ; ----------------------------------------------------------------------
>
> 2026-02-01 * "Buy EUR lot 1"
> Assets:EU:Checking 500 EUR {"20260201"} @@ 600.00 USD
> Assets:US:Checking -600 USD
>
> 2026-03-01 * "Buy EUR lot 2"
> Assets:EU:Checking 500 EUR {"20260301"} @@ 575.00 USD
> Assets:US:Checking -575 USD
>
> ; ----------------------------------------------------------------------
> ; Buy 100 IMBL with 1000 EUR (10 EUR/sh)
> ; At trade time, 1 EUR = 1.25 USD, so 1000 EUR = 1250 USD.
> ; Section 988 gain on EUR used: 1250 - 1175 = 75 USD.
> ; IMBL is kept with EUR cost; FX gain goes to Income:US:FX:Sec988.
> ; ----------------------------------------------------------------------
>
> 2026-04-01 * "Buy 100 IMBL with EUR, realize FX gain on EUR lots"
> Assets:EU:Checking -500 EUR {"20260201"} @ 1.25 USD
> Assets:EU:Checking -500 EUR {"20260301"} @ 1.25 USD
> Assets:EU:Checking 1000 EUR @@ 1250 USD
> Income:US:FX:Sec988 -75 USD
> Assets:IBKR:BVME:IMBL 100 IMBL {"20260401"} @@ 1000 EUR
> Assets:EU:Checking -1000 EUR
>
> ; ----------------------------------------------------------------------
> ; Sell the 100 IMBL for EUR, no immediate 988 gain
> ; Price: 11 EUR/sh -> proceeds 1100 EUR.
> ; EUR/USD = 1.30, so proceeds get a new USD basis 1430.
> ; Capital gain: 100 EUR, also tracked in USD (130 USD) for tax.
> ; ----------------------------------------------------------------------
>
> 2026-05-01 * "Sell 100 IMBL for EUR, record EUR capital gain"
> Assets:IBKR:BVME:IMBL -100 IMBL {"20260401"}
> Assets:EU:Checking 1100.00 EUR
> Income:CapGains:EUR -100.00 EUR
> Assets:EU:Checking -1100.00 EUR @@ 1430.00 USD
> Assets:EU:Checking 1100 EUR {"20260501"} @@ 1430.00 USD
> Income:CapGains:USD -130 USD @@ 100.00 EUR
> Equity:Tax:CapGains:Bridge 100 EUR
>
> ; ----------------------------------------------------------------------
> ; Later EUR -> USD conversion (where section 988 is realized)
> ; Assume one month later, 1 EUR = 1.40 USD.
> ; EUR disposed: 1100 EUR
> ; USD received: 1540 USD
> ; FX gain: 1540 - 1430 = 110 USD (section 988-style).
> ; ----------------------------------------------------------------------
>
> 2026-06-01 * "Convert 1100 EUR back to USD, realize section 988 gain"
> Assets:EU:Checking -1100 EUR {"20260501"}
> Income:US:FX:Sec988 -110.00 USD
> Assets:US:Checking 1540.00 USD
>
>
> Thanks in advance...
>
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