RetireJapan

Hi all!

I am trying to fully grasp the base currency setting with Interactive Brokers. Let's say I had an account with IBKR for international markets with plans to invest mostly in Vanguard ETFs. I would be feeding the account with JPY and eventually cash out in JPY as well. Is it safe to assume the best base currency would be JPY in this case? To purchase the ETFs, I would convert to USD before the transaction?

Also note that I am a US citizen so would need to file relevant returns, etc. with IRS as needed. Not sure if this makes USD "better" in any way.

Thank you in advance!

I'd go USD. I think having all in $ would simplify US tax reporting, year-end statements, etc.

And on the off chance that your IB data could be imported into something like turbotax (which is the case with other major US brokers), this would be the deciding factor, if it was me. FYI, my US broker's year-end statement data imports into TT in about 15sec, and it's all in the correct place, no mistakes. True, you do have to buy the correct TT package (premier level), and TaxAct probably works about the same way, but it's really slick/amazing the way it works.

I guess on the other side--here--you then have to manually convert various things to yen, looking up the TTM rates for specific dates, etc. So perhaps it's something like, "choose your poison."

edit: For your US investments, avoid partnerships (anything with L.P. in the name). These frequently/typically issue K-1 forms, which are a tax hassle. Not impossible, but also not 'automatic' in the way that normal companies are. K-1 forms also usually come late, which will complicate your tax filing here.

Thank you very much for the insight! So many poisons to choose from!
Good point that the US tax filings and such will probably be more of a hassle than those in Japan. Might be simpler to report in USD and then do manual JPY adjustments in my Japanese forms. Will keep reviewing as I go ahead. Thank you again!