Identifier: C2T7L2 | Revision: 2026-10-26

Decision and objectives

A TRY account statement shows a profit on a USD bond even though its clean USD price fell. Separate coupon, accrued cash, security-price movement and FX effects. This is an economic attribution, not automatically the tax base. Legal income categories can require different conversion dates and adjustments.

Objectives: Reconcile clean and accrued amounts; Separate security and currency attribution; Preserve transaction-level tax evidence.

Prerequisites: C2T7L1.

Mechanics

Coupon cash is the issuer's periodic payment. Discount income can arise from purchasing below redemption; sale gain or loss depends on purchase and disposal values under the chosen ledger. Purchased accrued interest compensates the seller and must not be mistaken for a fresh return earned after purchase. Currency effects arise when the investor measures foreign-currency cash in TRY.

Keep each transaction's nominal, clean amount, accrued amount, fees, date and currency. A single combined account balance cannot establish how much was coupon income, capital proceeds or an external cash transfer. Tax reporting may treat components under specific statutory methods; never choose a classification merely because it produces a smaller tax.

Price and return drivers

For a simple closed holding with all cash converted at one final FX rate, let initial USD outlay V0, final total USD wealth V1, initial FX X0 and final FX X1. TRY gain = (V1−V0)×X0 + V1×(X1−X0). The first term measures the USD result at initial FX; the second translates final USD wealth at the FX change. Other decompositions can allocate the interaction differently; disclose the method. If coupons convert earlier, value them individually on their actual dates.

Worked case

Hypothetical USD bond: face 10,000; entry clean 98.00 and accrued 1.00 per 100, no fees; dirty outlay USD 9,900. Receive one coupon USD 300. Sell at clean 97.00 and accrued 0.50; dirty sale USD 9,750. Total USD wealth 10,050; USD gain 150. Decompose: clean-price loss (97−98)/100×10,000 = USD −100; coupon +300; accrued change (0.50−1.00)/100×10,000 = USD −50. Sum = USD +150. The full coupon is not the entire economic gain.

Assume all final USD cash is converted together at TRY 33/USD; entry FX 30. Initial TRY outlay 9,900×30 = 297,000; final TRY value 10,050×33 = 331,650; gain TRY 34,650. Attribution at initial FX: USD gain 150×30 = TRY 4,500; FX term 10,050×3 = TRY 30,150; sum TRY 34,650. No tax, reinvestment, financing or costs are included.

Adverse case

If final FX is TRY 28/USD, final TRY value is 10,050×28 = TRY 281,400; TRY loss is 15,600 despite positive USD gain. The same attribution gives +4,500 from the USD result and −20,100 from FX. If the coupon had been converted on receipt at a different rate, using final FX for it would misstate realized TRY cash. Reconstruct dates rather than infer returns from an ending balance.

Practical use

Retain trade confirmations, coupon notices, custody debits, FX execution records and acquisition dates. For a redemption, distinguish principal return from income and preserve any acquisition premium/discount evidence. GIB's investment-income guide explains different treatment frameworks; its publication date does not identify the applicable income year for every investor. C2T7L3 uses an explicitly hypothetical tax schedule so economic attribution and actual tax law cannot be confused.

Decision boundaries

Use this ledger to explain performance and to hand complete evidence to a tax professional. Do not apply a generic withholding percentage to all gross proceeds, or assume an FX gain is tax-free because it arose inside a bond holding. Do not net arbitrary losses across legally distinct categories. Defer a net-return claim when acquisition cash or income-date evidence is missing.

Practice and references

Exercise: hypothetical face USD 8,000, entry clean 100 and accrued 0.80; exit clean 99 and accrued 0.30; coupon USD 240, no costs/tax. Answer: entry dirty USD 8,064; exit dirty USD 7,944; final wealth USD 8,184; gain USD 120. Attribution: clean −80, accrued −40, coupon +240 = +120.

Takeaway: reconcile economic components first, then apply the independently verified legal tax classification.

Reference guide: turkish-eurobond, currency-gain-attribution, debt-holding-return, Purchased accrued interest, Capital gain, Currency attribution.

Next: C2T7L3. Topic test: C2T7.

Primary sources (checked 2026-10-26; changing terms require a publication recheck): Borsa Istanbul announcement amending Debt Securities Market Procedure — 9.1.5; Annex 1; quotation and settlement price distinctions; GIB investment income tax guide, February 2026 — Eurobond income; temporary Article 67; resident and nonresident examples.

Shared reference guide