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ExecConsult

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Everything posted by ExecConsult

  1. Who said it had to be a "qualified investment" or of "certified intent?" The IRS doesn't care where your accession to wealth comes from, they want a piece. In the case of Cesarini v. United States, a couple bought a piano at auction. Several years later they were cleaning it and found a little over $4,000. The Court found the sum to be taxable. https://en.wikipedia.org/wiki/Cesarini_v._United_States If you get money -- well, anything of value really -- it is taxable. If it is received as a gift or through inheritance, then the giver is one who pays. The IRS wants a piece every time anything changes hands. You have the right to disagree with the law but the IRS has something that makes that not matter. They have POWER to enforce the law (including regulation). Good luck. You may need gregp's help in the end. Good luck and Best of Blessings, Mark
  2. 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
  3. Please refer to previous posts on this topic. Easiest to find is here: http://dinarvets.com/forums/index.php?/topic/29697-default-irs-rules-on-currency-exchange/
  4. The analogy your wife tells is great for understanding income. ("Accession to wealth") It is a little different with gifts. With our situation it really won't matter a great deal because the basis is so low. However, a gift is actually received at the previous owner's basis. It is in IRC Section 1015. You can google "gift basis rules" to find a good explanation. The "income" amount would most likely be the same. There are two reasons to document any gift. First, whoever gave the dinar is going to want to be able to prove that it was given pre-RV so they can avoid gift taxes. Second, there is a slight possibility that the person who received dinar as a gift could claim different tax treatment. This would be fact specific and would probably still have to be fought in court. I won't go into the specifics here. Anyway - probably same taxes - document anyway. Best of Blessings, Mark
  5. Yes, it is based on income AND profit (which is included as part of income). How it is figured is just like if you were running a business selling widgets. The profit would be however much you received from customers less the materials and other expenses involved with making and selling the widgets. In the case of the Dinar, the profit will be whatever you receive from them minus whatever you paid for them. You will be taxed on that amount. If you reinvest your profit they don't care. You still got the profit and must pay taxes on it. The reinvestment only matters when taking a distribution from qualified retirement plans. Hope that helps. Best of Blessings, Mark
  6. It is true that you will have to complete a FINCEN 104 which is required for any currency transaction of greater than $10,000.00 in value. The whole - Currency Exchange vs. Investment thing is not going to help you. This is the same type or argument you see from people saying that you don't have to pay any taxes on wages. There are so many people out there who are armchair attorneys who are certain that you do not have to be part of the Corporate United Sates of America, play on words, and back it up with Supreme Court case law. Whether they are right or not does not really matter. What matters is what will be allowed to happen regardless of whether they are right or not. The government is power and will yield it whether we think they should be allowed to or not. Currently, for tax purposes, the government recognizes and enforces the laws as contained in the Internal Revenue Code. The IRC does not care whether you call it an investment or try to assert your rights to exchange currency. The IRS is simply going to look at the underlying transaction (purpose for the exchange) and determine if it was a "personal financial transaction" or of an investment/business nature. Belive me that they will determine that it is of an investment nature and will tax you accordingly. Trying to "fight" it along these lines will only lead to the people you want to serve you at the bank thinking you are nuts. It may also lead to a difficult time getting an exchange done and will not make a difference as far as the government's ideas on what you owe taxes on. In fact, even if you were to go into Iraq post RV and spend the money on a hotel, the IRS regulations make it very clear that you would be taxed on the increased benefit you reaped by getting the value of a hotel room that you actually paid less than pennies for - and you would be taxed on it. An exchange for USD, for gold, for a house, for a car, for French Francs, or ANYTHING other than other Dinar is considered a "disposition of the non-functional currency." At that time of "dispostion" the IRS figures the value of what you receive and subtract what it cost you to get it (basis) and that is your taxable income. Hope that helps. Best of Blessings, Mark
  7. I'd like to get some more clarification to your question. What a trust is called is not important to what it does and is even sometimes misleading. People will sometimes use a fancy sounding name for a type of trust for marketing purposes. To that end I'd like to understand what you mean by pedigreed, court-ordered trusts. I have not heard of pedigreed trusts and usually the court only orders the creation of trusts in a situation for a disabled party or a minor. Some states will not even give a court authority to order a trust at all. Saying a "trust" is like saying "automobile." It has a few parts that must be there but other than that it could be ANYTHING from a moped to a tank. A trust must have five parts. 1) Grantor 2) Beneficiary 3) Trustee 4) a writing (the trust must be written with very limited exceptions) 5) corpus (there must be something in the trust. Other than that there are many ways to structure a trust for many different purposes. What is it that a pedigreed, court-ordered trust is supposed to accomplish? Where are you getting your information from? Once these questions are answered, it is possible that I could help you understand what you need to. Best of Blessings, Mark
  8. I like the Texas legislature's response. My wife told me of an article stating that it is now legal for teachers in Texas schools to be armed. Best of Blessings, Mark
  9. It seems only natural that a widely publicized tragedy like the most recent school shooting would raise awareness in parents minds of their children's safety. Texas has taken an interesting approach to it by changing their laws so that now teachers may be armed (of course with appropriate training etc...) to protect themselves and their students. hmmmmmmm
  10. He is an attorney who specializes in asset protection structures.
  11. I have given many free consultations and sometimes people have paid me for them. Because of my current circumstances a few people have been kind and sent dinar as a gift or even sent as a gift and then I have agreed that I would make sure they were taken care of post RV, but I have never taken dinar as payment for a consultation at least not yet. My circumstances are as follows: I stay home and take care of my children and my wife who is still recovering (slowly) from medical problems. This is how it has been for several years now. I can't work much but have had plenty of spare time where I am stuck at my kitchen computer with kids running around me (like right now). This has given me the opportunity to help people - people who would never have paid for appropriate counsel have often gotten if for free. At least that keeps them from believing some of the misinformation out there or worse -- turning to some of the sharks that would have gotten them in trouble in the long run. Those who could afford it have paid me and for that I am grateful. My wife is beginning to recover a bit more and I have begun going back to school for a legal masters degree (LLM) in Elder Law. Once there is an RV, anyone who turns to me for help will find it. I will not do the work myself but will find the appropriate people to help. I will manage a case or handhold as long as necessary. Until the RV I just do what I can. I do estate planning work for Kansas Residents (but will temporarily stop this work some time in January). I also do some tax and asset protection consulting. I do not claim to be an "expert" in either area but am well informed and with regards to the dinar investment I am very well studied and have conversed/consulted with several tax "experts" regarding what will happen. People most often reach me through my website. The name of my firm is Advanced Legal Planning. Best of Blessings, Mark Now I will get back to studying for finals.
  12. Regarding avoiding taxation, I have seen these arguments and similar arguments for a long time now. No matter how much I keep telling people about how it really works, they just keep popping up when people have forgotten me. :)/> The original post said: Treasury Regulations, Subchapter A, Sec. 1.988-2 (a)(1)(ii) states as follows: "Clarification of section 1031. An amount of one nonfunctional currency is not “property of like kind” with respect to an amount of a different nonfunctional currency." In other words - Okie's idea to exchange to a different currency and escape gains will not work. In fact, the regulations take it a step further and state that any time a nonfunctional currency (for us that is ANY currency that is not US Dollars) is exchanged for ANYTHING else, gain or loss is figured by first assuming that the nonfunctional currency was exchanged for functional currency (US dollars) and then the US dollars were used to exchange for the item. (see 1.988-2 (a)(2)(ii)(B )) In fact, in example 2 under Treasury Regulation 1.988-1 (a)(9 )(ii) the regulation discusses exchanging a nonfunctional currency for hotel room, food, and vacation expenses as a taxable disposition of non-funcional currency. As long as you are under the US tax system, if you take dinar and exchange it for ANYTHING other than dinar then you have to recognize gain or loss. There is no way around it. Regarding capital gains, the post said: Anyone who has done any real tax analysis (or has read mine) knows that we will not be looking at capital gains rates anyway. Because your ownership of dinar is for investment purposes, it is not a "personal transaction" under section 988. Therefore, you will be required to look at any income as "interest income" and pay ordinary income taxes on it. Best of Blessings, Mark
  13. Regarding avoiding taxation, I have seen these arguments and similar arguments for a long time now. No matter how much I keep telling people about how it really works, they just keep popping up when people have forgotten me. The original post said: Treasury Regulations, Subchapter A, Sec. 1.988-2 (a)(1)(ii) states as follows: "Clarification of section 1031. An amount of one nonfunctional currency is not “property of like kind” with respect to an amount of a different nonfunctional currency." In other words - Okie's idea to exchange to a different currency and escape gains will not work. In fact, the regulations take it a step further and state that any time a nonfunctional currency (for us that is ANY currency that is not US Dollars) is exchanged for ANYTHING else, gain or loss is figured by first assuming that the nonfunctional currency was exchanged for functional currency (US dollars) and then the US dollars were used to exchange for the item. (see 1.988-2 (a)(2)(ii)(B )) In fact, in example 2 under Treasury Regulation 1.988-1 (a)(9 )(ii) the regulation discusses exchanging a nonfunctional currency for hotel room, food, and vacation expenses as a taxable disposition of non-funcional currency. As long as you are under the US tax system, if you take dinar and exchange it for ANYTHING other than dinar then you have to recognize gain or loss. There is no way around it. Regarding capital gains, the post said: Anyone who has done any real tax analysis (or has read mine) knows that we will not be looking at capital gains rates anyway. Because your ownership of dinar is for investment purposes, it is not a "personal transaction" under section 988. Therefore, you will be required to look at any income as "interest income" and pay ordinary income taxes on it. Best of Blessings, Mark
  14. After more than a year of waiting, we can see the new proposed regulations to Section 988 that the IRS has promulgated. They do not touch on the problems with section 988(e). We have received no further guidance. But, were we REALLY expecting to. Just like with everything else, it is hope that keeps us moving forward. Best of Blessings, Mark
  15. You can actually invest up to 100% of your first $16,500 of income and then up to 20% of additional income after that. What is even more cool is that your solo 401(k) can be a "Roth" solo 401(k). With a Roth Solo 401(k), you contribute after tax dollars, but ALL INCOME IS TAX FREE (not only tax deferred). If you think there will be a lot of income, This is the way to go. Best of Blessings, Mark P.S. Good article from WSJ online can be found titled 401(k)s for Solo Business. It is written by Jane Hodges
  16. I only found this topic because I did a search on "taxes" to see if anyone had questions I could help answer. This is not the usual sort of post I'd jump into. However, I have a few thoughts I might offer. First allow me to introduce myself. My name is Mark and I'm an estate planning attorney. (See my profile for an abbreviated disclaimer.) I am usually very pleased with the friendly responses that people receive as long as they are trying to help. The responses I saw here surprised me a little. It is obvious that black77 was only trying to help even though he must have known that what he said would be unpopular. I am grateful for his courage. I hope that no one feels I am bashing them here. That is not my intent. I just want to bring a different perspective. I have been advising people on dinar related stuff for a long time. I hope the fact that I am advising them on taxes, estate planning, and asset protection instead of just being super wealthy and ignoring them doesn't make them feel my advice is somehow no longer wisdom just because I am teaching instead of doing. In my line of work, I know more financial advisers than I know attorneys (I am working with people's financial planning and I don't go to court anymore.) Usually I find the advice of the financial advisers I work with to be sound. They are a valuable resource and I hope that all of us will rely upon sound financial advice once there is an RV and you have money to manage. However, in divining the future of this investment, whether I know what I am talking about or a financial adviser knows what he is talking about does not really matter. Neither of us were trained on the structure of an Iraqi RV. What this breaks down to is one person's educated opinion (RD first then RV) vs. the opinions (some educated and some simply hopeful) of people who frequent the dinar forums (RV without RD). I'm sure that the advice that black77 received seemed reasonable to him. Truthfully each of must realize that we are taking a gamble of sorts. The risk is small and the potential rewards are huge so we are willing to jump in. I can not fault black77 for taking a little different gamble. Does his adviser know something that we haven't been hearing in your little myopic world of dinar RV land? Instead of attacking the messenger, I'd like to know why the financial adviser thought there would be and RD first and then compare that to the information that says RV first or at the same time and see where I end up. It might seem like I am thinking worst case scenario a little. That is because I am. That is my job; think of the worst case scenario and plan around it. What do I think will happen? I really don't know. As many have pointed out, none of us has had an experience that would tell us what to expect going forward in this speculative investment. The best any of us can do is get the best information that we can, share it, and receive the information that others share - then we decide for ourselves what to believe (at least for the moment). That process should not end until this is over (or you are worn out and just can't handle the roller coaster anymore). I am not suggesting that the adviser that black77 sat with is correct. In fact I see a couple of problems with it myself. However, where there is information I want it. If it is information that might tell me I am wrong I feel it is even more important to look at. Each of us has been burned at some time in our lives by only looking at the information that agreed with us and ignoring or even discrediting the rest. So for what it is worth I gave black77 a positive for trying to help even when it is unpopular and if you are out there black77, I'd like to know why your financial adviser thought RD first. It may be the same stuff I've already heard, but I'd like to have the opportunity to see for myself. Best of Blessings, Mark
  17. what do you need it for? That could make a difference in how it needs to be drafted or even if it would be better to use another type of document. Best of Blessings, Mark P.S. See my profile for an abbreviated professional disclaimer.
  18. I can't see this ever passing the current Congress.
  19. If you are trying to find information on the use of an LLC with an IRA, you might search on a term that it is well known as. It is often called a "checkbook IRA." You can also set up a 401k the same way. Best of Blessings, Mark
  20. Unless you qualify for one of the exceptions, cashing out before age 59 1/2 will result in a 10% early withdrawal penalty. Best of Blessings, Mark P.S. Do a quick internet search on "IRA Early Withdrawal Penalty" to get more info.
  21. Though I have not read the law myself, my understanding is that this tax is to be applied to all "unearned income" for people who earn $200,000 or more ($250,000 if married filing jointly). That would include most (if not all) dinar holders. Unearned Income may also be simply defined as investment income. Gains on exchange rates of foreign currency will most definitely be considered "unearned income." Let us hope that we get people in government who can kill this thing. Best of Blessings, Mark
  22. There are many IRA custodians that will not buy particular assets through their IRAs. That is why I provided the list in the following post. My recommendation would be to use NAFEP. Best of Blessings, Mark
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