Foreign currency gains and losses should be reported on Form 8858 in the appropriate sections of the form. Gains and losses from the sale or exchange of foreign financial assets are reported on Schedule D, while gains and losses from the holding of foreign financial assets are reported on Form 8940, which is attached to Form 8858. The gains and losses should be calculated in functional currency and then converted to U.S. dollars using the exchange rates in effect on the dates of the transactions. The resulting gains or losses are then reported on the form.