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If my pet hamster buys foreign currency with U.S. currency,

  1. Apr 10, 2015 #1
    then buys back the U.S. currency when it has depreciated against the currency he bought, and conducts all these transactions with paper currency, has he safely avoided having to report this gain as income?
     
  2. jcsd
  3. Apr 11, 2015 #2
  4. Apr 11, 2015 #3
  5. Apr 11, 2015 #4

    MarcusAgrippa

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    Wouldn't that be classified as hedging? Except that it doesn't have a future.
     
  6. Apr 11, 2015 #5
  7. Apr 11, 2015 #6
  8. Apr 11, 2015 #7

    Nugatory

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    Staff: Mentor

    It will depend on the laws where you and your hamster live. Under American law, taxes are due on any income that results from the activity of your hamster.
     
  9. Apr 12, 2015 #8

    CWatters

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    In some countries a one off transaction like that would be treated as a capital gain rather than income.
     
  10. Apr 19, 2015 #9
    Your hamster's financial transactions may well be of interest to tax inspectors,
    but they would certainly be a lot more interesting to biologists.
     
    Last edited: Apr 19, 2015
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