I recently transferred stocks held in a European brokerage account to a US broker (Interactive Brokers).
Some of those stocks are American companies (e.g. General Electric) that were purchased on a European stock exchange and are denominated in Euro, have a different ticker symbol than in the U.S. and can only be traded on a European exchange.
Another stock position is a European company, for which a corresponding ADR (American Depositary Receipt) exists.
- For the first case (U.S. companies) Interactive Brokers offers a so-called “sector transfer”, which will convert a position from being denominated in Euro to one denominated in USD (with a corresponding change in the ticket symbol), so that the resulting position can be traded on a U.S. exchange.
E.g. 100 shares of General Electric would be converted from 100 shares of GCP (ISIN: US3696043013, currency: Euro) into 100 shares of GE (currency: USD).
Is this “sector transfer” a tax-free event? Or is it taxable (e.g. as if the original position was sold and then repurchased)?
- Another variant of this is that Interactive Brokers also offers an exchange for one of my British stocks (Diageo, symbol: DGE, currency: GBP) into the corresponding American Depositary Receipt (Diageo, symbol DEO, currency USD).
Once again I am wondering, if this exchange is tax-free, even though it’s not the identical security (but probably a substantially identical one)?
Naturally I’d only consider doing those exchanges, if they were tax-free, so any advice is greatly appreciated.