Hi guys, I've been talking for several months with my accountant and Interactive Brokers about a big mismatch in some tax reports and having a further look this weekend I've found the figures that are causing this problem. Wondering if any of you could have a clue about how Interactive Broker is calculating this figure to try and clarify the issue? I'll attach 2 files: 1- with the 'usd_transactions' 2- with the 'forex_pl_details_statement' Basically, I've got an account funded in GBP but I trade in US stocks and tend to borrow USD from Interactive Brokers and pay interest on those. What I noticed is that on the transaction in the attachment we've got: * BUY, Stock 205 CHGG 2019-07-09, 15:54:51 Quantity USD -8,803.725 Proceeds in GBP 7,064.55 Basis in GBP -7,064.55 0.00 which corresponds with a FXRateToBase from a Flex report of 0.80245 * SELL Stock -205 CHGG 2019-08-05, 10:05:03 Quantity USD 8,797.3685 Proceeds in GBP 7,013.11 (this is the value we don't know where it's coming from) Basis in GBP -7,245.69 Realized PL in GBP -232.57 where the figure on the 'Basis in GBP' is using the correct FXRateToBase value for that day of '0.82362'. But we don't know why the value under proceeds is different (at GBP 7013.11)? My accountant is calculating this trade as follows: * Purchase price in GBP = 7064.55 * Sell price in GBP = 7245.69 * Profit = GBP 181.14 However in the Forex PL report, we can see that Interactive Brokers has created a value of GBP 7013.11 (proceeds on GBP) for the sale (which we don't know where it's coming from, as the sell price for the day was USD 8,797.3685 x 0.82362 (the FX rate on the day of the sale) = GBP 7245.69 (not GBP 7013.11) And the report then indicates that this transaction incurred a loss of GBP 232.57 (rather than the profit of GBP 181.14 that my accountant calculated). 1. Anyone has a clue how the proceeds value in GBP in this sale (7013.11) is calculated? 2. And would you know why Interactive brokers is using that valued and not the basis sale value of GBP 7245.69 to match it to its purchase price of GBP 7064.55? Thank you!
It has to do with the GBP/USD rate which had a huge swing between those two dates: 1 GBP = 1.2479 USD on 8 July 1 GBP = 1.2144 USD on 5 Aug However you're reading this wrong. You actually logged a profit in GBP. Even though you sold the stock position at a small loss in USD, your being long about USD8,800 vs the GBP (i.e short about GBP7K) during that period netted you about GBP230 in profit since the pound depreciated nearly 2.7% against the US dollar in that time. If you had no other positions or made no trades in your account between 8 July and 5 Aug you would have seen your total equity increase by about GBP230 in that period.
That's how I was understanding it at first, however, looking at the complete report interactive brokers added the small loss on the trade and the -232.57 GBP as a loss so that the total equity decreased with that trade due to the FX movement. I've got 2 doubts: 1- How could the broker be calculating the proceeds in GBP figure of 7,013.11? with the FX rates of the purchase (2019-July-09) or sale (2019-Aug-05) date I cannot get that figure. 2- Not sure if I explained it properly above, my account is funded in GBP but when I trade US stocks I borrow that amount from the broker and pay interest on it to avoid much exposure to this currency movements, so if I borrowed from them USD 8802.7 and I returned to them one month later USD 8798.6, in theory, I shouldn't have incurred much profit or loss (as the money was borrowed and I returned almost the same amount I received in the 1st place), should I?