I am constantly surprised what happens when you put two different ideas or activities together and see what falls out of your brain. 

So a friend of mine and I are discussing the falling American dollar and I am finishing my taxes and this example popped into my head. 

So you have $100 dollars and you buy a foreign currency because the policies of the U.S. Treasury, Federal Reserve, and Congress are inconsistent with preservation of wealth by holding dollars.  Now say you were right and the value of the U.S. dollar decreases in value relative to the currency you purchased. 

From the IRS's perspective, sales proceeds minus purchase cost plus fees equals a capital gain, the time difference between purchase and sale determine if the gain is long or short-term.

The question is did you have a capital gain?  You did not let your wealth depreciate with the U.S. Dollar but now the number one reason wealth was destroyed (the Federal Government) wants a piece of the preservation, not growth of your wealth.   

I posted a currency update on March 9, 2011 so go back and take a look at the chart and think about how much wealth you have lost because of the policies and actions of the U.S. Treasury, Federal Reserve and Congress.