Currency speculation - Capital gains

What is the name of your state?MN

If you invest in foreign currency and then convert to US dollars, does that fall under Capital Gains taxation? All I could find on the IRS site was references to "notes", is that the IRS terminology for currency bills?

I was looking at the IRS info for "Like-Kind" investing, as like-kind can defer capital gains taxation. What I am not sure about is if this ruling only applies to CONUS investments versus foreign investments. For instance, if I invested 1K into the Vietnamese Dong (please skip the jokes, it wasn't I that named their currency, it is trading at 15K+ VND to the dollar) I would have 15M VND. Now lets say the VND goes to 1-1 on the dollar. I now have $15M USD. Could I invest that into other foreign currency to defer capital gains? Such as investing in the FOREX currency market.

Thanks for any info you can give me. HR-Block, IRS, and a couple currency locations didn't give me much.

Jared

[Snipes5]

Yes, gains on currency exchanges are considered Capital Gains.

As far as I am aware, 1031 exchanges apply to real estate, not foreign currency, collectibles, etc.

So in that case no, you cannot defer the gains on a currency exchange.

Snipes