Interactive Brokers: 'Forex P/L Details' statement doubt - Proceeds in GBP on a sale of US stock

[mickael28]

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!

 

[ironjaw]

Did you ever find out. I know that there is an account for traders. You can google them up.

 

[mickael28]

I wrote support a few times but they've not clarified yet. They looked into a different trade the 1st time.

But after having a further look, I don't fully understand that ' Forex P/L details' section but I think in my case it's not even applicable, as in, I'm borrowing the USD money from the broker, so the FX movement that happens there I don't think fully applies to me.

The best section to check my PL was where they detail the 'Realized gains in GBP', although there they don't breakdown the purchase and sale price, just the summary.

 

[Roddy99]

Did you ever get to the bottom of this. I am wondering if they did something like 'hedge' the FX for you using a forward?

 

[ResponsibleYogurt301]

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!

I use Interactive Brokers as well and also find them very confusing. Any information you find about this, can you please post it here. I'm new to Trade2win. Thank you!

 

[mickael28]

Interactive Broker's support is usually really bad, they barely reply and when they do, a lot of times they don't even answer the question. In this case, they didn't even reply and I had to file my tax return before that.

We don't quite know how those IB reports get generated or what they actually mean, as the figures don't quite match. What I ended up doing was to try to get the final figure of PL for the year to match the figure of the report in GBP (with the individual trades maybe not been 100% accurate regarding the FX conversions or hedges they used).

Not ideal, but at least the final figure was really close to whatever the report was displaying, which is in what HMRC ends up basing your CGT calculation anyway.

It'd be much better if there was a way to create IB reports with all your trades in the base currency (GBP on my case) but regarding that, IB replied months ago and said that was not possible.