USD account

Not sure if this is the right forum to ask.

I have US shares via a US brokerage, when I am trying to manually add trades, sharesight seems to only allow me to add in AUD with and exchange rate.

But the account is in USD, how do I add the trade in it’s native currency?

I find it a little confusing myself it does have an Exchange Rate but I just add in USD and brokerage in USD and it works. I think the AUD is based on it being an Australian Tax domiciled but it still keeps my shares in USD. Does your add screen look like this.

Mine looks the same, but my problem still exists.

I purchased USD FIRST, then purchased these equities in USD. There should be no FX exposure on these trades.

I have been wondering this myself because it is hard to keep track of US cash when you sell US shares but want to keep the proceeds in USD. Sharesight still wants to exchange it to AUD. Or is it better handled by adding a foreign currency asset rather than a cash asset?

is this the same problem? if so please like and add comment :slight_smile:

Hi @wobbly_au!

With portfolios, you’ll notice on the set up you are required to set up a tax residency. This basically links to all of your tax and performance reporting for consistency across the portfolio.

It sounds like yours is set up in Australia, so any international trades will require a conversion rate back to AUD to follow this ruling.

Now with trades, there is an initial conversion of AUD to USD to make these trades. So in the conversion field, you would enter the rate that you received for the depositing of cash into your US brokerage account. If there are multiple deposits & conversion rates, you would average out the conversion rate for the cash used to buy those shares.

Hi Jack,

I think what is trying to be said is that I might send $5,000 AUD to STAKE and say its at 75c.
That should go into my cash account at 75c and each share bought from that point until those funds are depleted should be at that rate.

It seems Sharesight applies whatever the daily exchange rate is to a new purchase regardless if you already have loaded USD 1-2 months ago at a better or worse rate.

Yup Mlantry gets it.

I want to add trades at a fixed FX rate.

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The problem with that is trying to keep track of it from a tax perspective.

In theory when I transfer AUD to my Stake (USD) account, I am initiating a position in USD (which I enter into ShareSight as an FX security), then once I use it to buy stocks, I dispose of some/all of that USD position, which is valued at it’s current market value (exchange rate) and acquire a position in the stock at the same time (using the same exchange rate).

Basically it is the same scenario as if I bought Bitcoin and then used it to buy another cryptocurrency, which is discussed under “Exchanging cryptocurrency for another cryptocurrency” in this article from the ATO website https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia---specifically-bitcoin/?anchor=Transactingwithcryptocurrency

I feel like I’m also having this problem for Selfwealth. There’s a sharesight function to manually add USD under forex, and my USD stock purchases will auto upload into sharesight, but there’s not really a way to have sharesight link to my Forex USD funds and debit them when I buy a USD stock (and therefore when I sell the USD stock I’d need a Forex buy transaction of USD recorded)… #feature-ideas

@mlantry @wobbly_au thanks for confirming that, I must have read incorrectly.

Generally speaking, we don’t receive the FX rate that you receive when your converting funds into foreign currency. In short, there’s no way to automate a set currency rate as these fluctuate throughout the day and through the data inputs we receive.

With brokers like Stake or SelfWealth, your depositing funds in AUD that are then converted into USD at an FX rate. These conversions in currency are done within the broker and outside of any trading.

When these brokers then place the trade, their trade confirmations don’t specify any currency conversion as this is done prior to making the trades. As I understand, you’ll receive either a statement of deposit/conversion from the broker via email or in-app (feel free to correct me if I’m wrong here).

A workaround here would be to edit the trade once it’s imported to enter the FX rate that you received on the deposit of funds into that currency (if it’s a 1:1 when depositing and using all the cash converted to purchase securities).

If you have multiple deposits to build up to one buy rate, you would then need to average out the currency rates you received for each deposit to then enter these onto the trades applicable.

Hi @Jack_Sharesight wouldnt it be easier if we entered the cash at the exchange rate into a cash account and Sharesight take from that, ie if I have USD in Cash Account take from that and not to the daily rate. This goes into the bigger discussion of linking specific assets or trades to a cash account

I propose the following approach

  1. Establish a flag in the user profile called “USD Selfwealth/Stake” = Yes/No
  2. If Flag = Yes, then an Automatical FX duplicate trade is uploaded to the exact opposite value (i.e a Minus USD transaction)

As Jack so kindly helped me understand the other day, the business logic is already setup for the USD Stock purchase. So all we need to do is duplicate this logic, but as a Minus transaction on the FX USD Ledger. (i.e -if Flag = Yes, create a duplicate reverse transaction…)

This would need to be supported by logic to check if FX USD > USD purchase.
Sudo code style explainer:
IF FLAG = NO then END IF, ELSE IF FLAG = YES AND FX_USD < USD_stock_purchase_value, THEN CREATE FX_BUY & FX_SELL, ELSE CREATE FX_SELL.

That logic allows us to circumvent the issue until Stake & Selfwealth realise they need to send an auto email for AUD>USD swaps (although you could keep the logic anyway as a catch for people not sending auto emails to Sharesight. So money well invested!)

People have to remember that each trade in $USD still triggers a Capital Gains Tax event as far as the ATO or other tax office is concerned. So whether or not you transfer the money back to AUD (or GBP or any other currency you use) you still have to report on it in your home currency on your tax return. So you have to have an exchange rate for each transaction. As long as it is a logical and consistent rate the tax office will accept it. So my advice for trades that are entirely in a foreign currency, just use the Sharesight rate. As long as you are consistent no problem.

But there’s 4 events here.
AUD > USD
USD > Stock
Stock > USD
USD > AUD.

What is meant to happen here for the cash component?

Sorry, I’m just not following, because surely the ATO requires a foreign exchange cgt event calculation for the AUD > USD > AUD component?

Edit: my driving factor on being argumentative here (sorry) is that it sounds like people are suggesting you manually handle the foreign side. I just can’t accept this because as a user you need to manually create the USD buy/sell trades + duplicate a trade on your forex account for each Stock purchase so that your forex account is correct. I do not accept bandaid ideas, and it should be automatically done by sharesight…

As far as the tax office is concerned when you reach your stage 3. Stock>USD you have had a capital gains event and must account for the gain or loss in Australian dollars. Whether you do stage 4 USD>AUD on the same day or six months later at a different rate or reinvest the proceeds in a different US stock is irrelevant. If you have a consistent time for doing each transfer for example at the end of the month they may allow you to use that rate. You would need to get an accountant or the ATO to advise you on this. If your rate is different from the Sharesight rate it is easy to amend the Sharesight rate in the transaction screen.

@mlantry @huntermit always great to hear feedback and you’ve raised some interesting ideas and healthy debate :pray:

@mlantry It probably falls into the larger discussion around multiple cash accounts and being able to sync those to trades. It does seem however to not fall into the logic of our trade form, where you have the trade price x quantity and that either divided or times by the exchange rate to create an FX event for tax as outlined by @goronwyprice

@huntermit

It sounds like you’re using AUD:USD fx trades to be your cash account rather than the manual cash account in Sharesight as mentioned by @mlantry? If that’s the case it would be good for me and I’m sure others who are interested in this topic with your logic around this one?

Am I on the right track in assuming you make a trade, then make a duplicate trade in your Forex holding? For instance, buy 1000 units at 0.7 USD FX rates of x US stock, then you manually make a transaction on your AUD:USD fx holding for a purchase of 700 USD (at that FX rate)?

Sharesight can only import the information that’s available to us, as deposits to these brokers are completely independent of the trades that are made, we have no way of determining what the exchange rate is, our only identifier of an FX event is that the security is made in a market that exists outside of the tax residency of the portfolio.

In the meantime, we’ll get in touch with SelfWealth to bring this to their attention, we can’t guarantee a speedy fix but it’s always good to highlight what affects customers :+1:

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