Unitedrich

Default IRS Rules on Currency Exchange

72 posts in this topic

Wow this was a good read and bottom line to me is buy double the amount you feel that you need so when they do tax us you have enough afterwards. And thanks for all the great information.

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Dear ExecConsult, I am a tax preparer in California.  I just got out of tax season and still a bit blurry eyed so I didn't read this entire thread.  Also, I haven't read your link above, which I plan on doing. I've been in this investment for more than a year and as such, I am treating any of my profit from Dinar purchases that are over 366 days as Long-Term Capital gains.  I have to say "Let the Court proceedings begin!".  I will have enough money to defend my position and I expect the government to pay my legal and court costs....just sayin...LOL

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Mark, I just finished reading your analysis.  Based upon your analysis, I have to agree with you...HOWEVER, I disagree with the I.R.S.'s position and I will allow my counsel to argue my position based upon their analysis and the simple fact that I bought a worthless asset that appreciated, I held the asset longer than one year and therefore I am entitled to Long-Term Capital Gains treatment.  Oh, also, when I purchased the IQD it was NOT a currency because it was not traded as a currency.  When it RVs and I cash-in, it will be a currency...lucky me...lol

 

All the best to you and yours...GO RV

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Maybe I am missing something (or I am ignorant) here but I thought that I would be exchanging foreign currency for USD.

 

When I exchanged my USD for the Caribbean Dollar I simply went to the bank in St Lucia and did it with no problems, when I had money left of over in Caribbean Dollars I took it to there bank in ST Lucia and exchanged it for USD to go home......what was I suppose to report to the IRS? And Why? This was back in 2012 when I sailed the West Indies!  :shrug: 

 

Now I can understand if you have to pay the bank a fee to do this, but that was it and it was a small fee!

 

Mahalo :angel: 

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I want to pay taxes tomorrow and I don't care which way the IRS rules. Just DO IT! Then I will have the funds to fight the decision if I so choose! Let the games begin!

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I want to pay taxes tomorrow and I don't care which way the IRS rules. Just DO IT! Then I will have the funds to fight the decision if I so choose! Let the games begin!

 

What if they freeze access to all your funds, what will you use to defend yourself then?

 

-

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Boy am i glad i chose to INVEST in OSI

Can I get an AMEN!

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Maybe I am missing something (or I am ignorant) here but I thought that I would be exchanging foreign currency for USD.

 

When I exchanged my USD for the Caribbean Dollar I simply went to the bank in St Lucia and did it with no problems, when I had money left of over in Caribbean Dollars I took it to there bank in ST Lucia and exchanged it for USD to go home......what was I suppose to report to the IRS? And Why? This was back in 2012 when I sailed the West Indies!  :shrug: 

 

Now I can understand if you have to pay the bank a fee to do this, but that was it and it was a small fee!

 

Mahalo :angel: 

Was the resulting usd under $200?

I think that was what mark was referring to.

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This is not capital gains.

While the site you mention has good information for Capital Gains, the income from Dinar investments will be Ordinary Income (NOT capital gains) under Section 988. Please see my post above for more information.

Best of Blessings,

Mark

ordinary income result is not a blessing.

They don't tax us for income for exchanging euros for dollars and back again. Can I claim a loss for losing $2500 on a $7000 European trip I took in 2011 when I exchanged dollars for Euros at $1.42 and lost money?

 

NO.

 

I can't claim a loss. But if I MAKE money, they'll tax me for income. That's arbitrary taxation.

Yes I know you are referring to INTENTION to make money - but I would have loved to INTEND  not to lose money on my Euro exchange.

 

Euro exchange / IQD exchange. No difference.

Mark, I just finished reading your analysis.  Based upon your analysis, I have to agree with you...HOWEVER, I disagree with the I.R.S.'s position and I will allow my counsel to argue my position based upon their analysis and the simple fact that I bought a worthless asset that appreciated, I held the asset longer than one year and therefore I am entitled to Long-Term Capital Gains treatment.  Oh, also, when I purchased the IQD it was NOT a currency because it was not traded as a currency.  When it RVs and I cash-in, it will be a currency...lucky me...lol

 

All the best to you and yours...GO RV

not a tradable currency - but still a currency? Not sure about that...good point though

Edited by hame55
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I just signed up for Dinarvets, so  please forgive me if I appear out of the loop.

 

Does anyone know if member ExecConsult is still on these boards. And did he receive a response from the Recommendation for the 2011-2012 Guidance Priority List he posted. see attached.  Or was this a generic document that we are supposed to give to our own tax attorneys to send to the IRS for a ruling ? Please advise.

Recommendation for Guidance Priority List.pdf

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I have herd from the IRS! That if you have had your Dinar for over 3 years! It is "Long Term Capital Gains investment!" 15% TAX! That's great for me Because I have had mine for Over 10 years now! And when your figuring what you'll have to pay! Don't forget your state TAX!   I Figure it will be right about 21% for me and I live in Arizona! I can live with that!

  BUT! I you should do this As WELL!   I am Putting 43% in a short term CD or some savings account to earn as much as I can! Then if Obama decides to TAX us Short Term Capital Gains? and that is like 40% TAX!!!! If that happens and with him it very well could!  I will have the money to pay my TAX's !!!   Don't be caught with OUT! the CASH to PAY your TAX's for the year in that it RV's!   KEEP your receipts for when and who you bought your dinar from!   To prove it is Long TERM!   This was setup by Bush! and I just verified it about 3 weeks ago with an officer from the IRS! In a meeting about the Dinar!

   No Mater what you hear?  Or, What you Believe?  Do your self a BIG favor and put at least 40% of your Profit from the RV in a savings account! For TAX's!   If you don't? You will lose everything you just bought and More!     Just think!  If it ends up being 15%? Or, 21% with State TAX!    Your get a second windfall of MORE CASH of what is left of the 40%   (o;

   Just FYI:  Take Care, Everyone Have FUN!!!   Merlin...

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Who in the IRS did you hear from?  Most people there are not qualified to discuss section 988.  I asked an IRS investigator who knew enough to refer me to an international tax agent who was still unsure of the answer.  The information is only as good as the source.  Best of Blessings,

Mark

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I'm afraid that what's going to happen is that

when tax time rolls around, after the RV,

we're going to all end up in pool, on hold,

while the IRS tries to figure out what to do

with us...

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I have two "words" for the IRS. F U

Tired of the government! Tired of Taxation! (Sound Familiar?)

Dump the tea in the harbor folks!

Wm13

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I have two "words" for the IRS. F U

Tired of the government! Tired of Taxation! (Sound Familiar?)

Dump the tea in the harbor folks!

Wm13

Not very effective when you need to work within the system. :eagle:

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You've seen the unofficial IRS motto haven't you?

 

"We have what it takes to take what you have!"

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A question for "ExecConsult" . . . .Mark, when you state that the income from our RV exchange will be "Ordinary Income", but also later stated that it would not be subject to "Social Security and Medicare taxes of 15.3% for self-employment", I assume that is because in this case, it may be treated as "ordinary income", but NOT as "Earned Income" for those of us under 66 and "full retirement age for SS", who might also need to deal with the Govt. on that front.  Thanks.

 

Also . . . a shout out to "Merlin" for advising those that do dare to file as "Capital Gains" to set aside a good chunk to cover the balance due  when The IRS comes a calling, along with penalties and interest due down the road.

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Excellent read.  Thanks everyone for the input, specially to ExecConsult.

I know that not all here are retired, some are, some are not.  I am.

My take on it all is based on one question;  Why cash it all in at one time?  Yes, I know about the fear of a short window of opportunity to cash the Dinar in but I doubt that will be the case.  Even at 1.2 it is still going to take Iraq some time to stabilize, most likely years if not another decade.

Cash out to the extent your bills are paid off.  Maybe you build a new house, maybe you continue to live in the one you already have in a neighbor hood or area you love. Why leave family and friends behind?

I think I'm safe to say that 'un-transacted or un-converted' Dinar sitting in my safe will not be considered as capital gains until such time as I do convert or exchange them. I'll do that as the need arises; when it's time to have the car fixed or go on another Senior Cruise I'll cash some in and pay the piper.

GH

 

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