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Tax Shelters


GT ACE
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I have a good and trusted investment counselor that I have made investments with in the past. Through all of the ups and downs in the stock market I have actually made money with his help.

His family and my family go back to when his parents and mine went to high school together back in the early 1940's. Together we have a mutual friend who is a former IRS agent now working privately doing tax returns out of his own office. My family friend and I will be meeting with him in the next few days to get the latest info on IRS tax laws.

One of the few ways to get "tax free" income from our Dinar will be discussed! Has anyone ever heard of a "Charitable Remainder Trust"? A charitable remainder trust can pay 8 to 9% tax free per year income for life! It might be wise to diversify some money into this type of deal which will at least for now, keep pace with inflation and beat taxes! I will have more info on charitable remainder trusts in the next few days and will post what ever info I am able to pick up.

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Make sure you fully understand what a Charitible Remainder Trust is. A close friend gifted most of the sale of his company to his church thru a CRT. The stock market tanked and his % of income from the CRT dropped significantly. He has been in a financial bind now for several years.

This might be the right way to go for some folks and I am not saying it isn't. Just make sure you fully understand any investment before placing your money in it. JMHO

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GT ACE - please keep us posted with the info you come across - from what i keep hearing the govt will be taking up to as much as 48% - well screw that- besides what are they gonna do with it besides blow it - i can do that myself LOL -

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I have a good and trusted investment counselor that I have made investments with in the past. Through all of the ups and downs in the stock market I have actually made money with his help.

His family and my family go back to when his parents and mine went to high school together back in the early 1940's. Together we have a mutual friend who is a former IRS agent now working privately doing tax returns out of his own office. My family friend and I will be meeting with him in the next few days to get the latest info on IRS tax laws.

One of the few ways to get "tax free" income from our Dinar will be discussed! Has anyone ever heard of a "Charitable Remainder Trust"? A charitable remainder trust can pay 8 to 9% tax free per year income for life! It might be wise to diversify some money into this type of deal which will at least for now, keep pace with inflation and beat taxes! I will have more info on charitable remainder trusts in the next few days and will post what ever info I am able to pick up.

Thanks for the info. Very much appreciated.

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CTRs can be a great investment vehicle if the shoe fits. Armchair Advice

1) Make sure a CTR is the right investment vehicle for you, &

2) if you chose this vehicle, make sure you're in the right type of CTR according to age, needs, etc. Some provide fixed incomes for life (or capital exhausted). Some provide variable income. While internet research can point you in the right direction, there's nothing like a trusted, paid investment planning professional.

Keep us posted!

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Charitable Remainder Trusts (CRT) are interesting vehicles for tax planning, income planning, retirement planning and charitable planning. We are third party administrators (documents, asset management, annual reporting etc.) for a variety of these vehicles and you can do some interesting things especially when they are self-trusteed.

Short version, you can transfer appreciated assets (cash or cash equivalents are best like the IQD) to a CRT and the CRT will pay no capital gains taxes when they sell the assets. The income beneficiaries gets paid based on a percentage (minimum 5%) of the FMV (Fair Market Value) and upon the income beneficiaries demise, the remaining assets are transferred to the designated charity. The donors also get a current Charitable Contribution tax deduction which is based on the FMV. In the case of IQD the highest FMV would be post-RV. If the income beneficiaries are the same as the donors there is no gift tax paid on the transfer.

In addition to the tax advantages inherent in just establishing the CRT structure, you can manage the assets to control the tax levels of the pay-outs. Basically the income beneficiaries must pay tax based upon the tax character of the invested assets. If the investments pay interest income - ordinary income tax, capital gains income - capital gains tax, tax free income - no taxable income. In this era of uncertain taxes, being able to adjust your personal income tax rates is a powerful planning tool to have at your disposable.

You can get more information and answers at this Charitable Remainder Trust Q & A.

Good risk management techniques (i.e. diversify your investment markets stocks, bond, annuities etc.) can protect against the loss problems that were described by chimeria. We are enrolled to practice before the IRS so we need to insert a disclaimer that this is "NOT TO BE CONSIDERED PROFESSIONAL ADVICE" and we strongly urge all IQD investors to consult with their own team of financial professionals.

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Very wise to get a trusted professional especially, with IRS backed up experience.

Following the counsel of the "unprofessional"; "I've got this great deal"; "this is really the law, they just don't follow it" outfits will make the IRS look like "lifesavers" when you get done.)

Those outfits take your money, just keep you trailing and then leave you hanging.

They get you to believe what may have been true at one time, but you can't defend now (those 12 people on a jury are asked right off, "do you pay your taxes?", "do you go to an accountant to get your advice?"

Then when you have a bulls eye on you they will say, "I'll help you out for a million." If it is a "theory", you will find out they are either in court, headed for jail or in prison. You will find out it cost a lot less to pay the taxes and have a life.

That doesn't mean there are not legal ways to structure capital gains with tax planning. That is why this forum is so valuable - with wise counsel, and knowing the law that is defendable, we can use the money from this investment for our Financial, Spiritual, Physical and Mental well-being.

I really look forward to hearing the info you get - GT Ace!

Edited by elm72
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i am planning on waiting after the rv to seek professional help with tax lawyers nad investment ppl. before i cash in. i think i would have more respect that way. any comments on that would be helpful. i am not a viper as i just can't fully trust ppl. on this investment thru the internet. i would prefer seeking personal advice. but first we wait on the rv. if it comes in around a dollar like adam thinks, and soon, i hope i can wait till june so part of it will be long term cap. jim

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GT ACE...I believe inmarc brought this up in VIP. I checked into this as well. This is a really good option. Chimera is correct however. (If the value of investments goes down, you are still stuck with the same payment/distribution %.)

FROM WHAT I CAN TELL, verify for yourself:

1) You can transfer appreciated assets to the trust tax deferred.

2) The trust can sell/exchange the asset without paying tax at that time. (Realizing gain, not recognizing gain.)

3) You only pay tax on what is paid/distributed to you for that year. (Calculation based on a set % of the FMV of the assets.)

4) The remainder upon your death or another time period you chose will go to a charity.

5) The percentage you draw for the year can be anywhere from 5% to 50% of the FMV of the assets (valued annually). (At least 10% has to be left as the remainder that goes to charity.) The payments can be installment or lump sum. I BELIEVE THE PERCENTAGE IS FIXED FOR THE LIFE OF THE TRUST. So if assets depreciate in value, you get paid less because you don't change the percentage. VERIFY this.

Also I think from what I read (IRS code is written just to confuse us! LOL), you offset the amount of income you are distributed in that year with early charitable distributions. Again, verify this info.

Looks like these can be set up to:

1) Pay you for a set number of years.

2) Pay you for your lifetime.

3) Pay you and another recipient concurrently/consecutively. Both receive payments, upon the death of one recipient, the survivor gets the deceased portion until their death.

4) Pay you and another recipient consecutively. Upon your death, the recipient will recieve payments for their lifetime.

When the above options end upon the death of recipient(s) or term in years ends, the remainder goes to a qualifying charity.

This is good because you avoid paying the cap. gains tax, so if you have 1 mill, you can use the entire 1 mil. for investments to base your potential earnings off of instead of paying the cap. gains and using what is LEFT to invest and your potential earnings would obviously decrease.

One idea I saw was to also get life insurance policies to get $$ to different beneficiaries who will not have any benefit as the assets would go to a charity.

Lastly: If you have dinar classified with long and short term holding periods, and you put some in a CRUT...allocate the short term to the CRUT if possible. I am not sure how this works, maybe someone with more knowledge could help here. I myself have dinar that I have held over a year, and some under a year. Obviously if you are going to use the CRUT and it is possible to allocate which dinar transfers to the CRUT you want to transfer the dinar with the short term holding period because they are taxed at the higher cap. gains rate. Anyone who can confirm or tell us how the allocation works or if there are any restrictions? I wouldn't think there could be. But then again, with the IRS, who knows.

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Thanks to all that have added to my post. A special thanks to FDyer for the details on CRT's. I was not expecting such a response to my first real post but it obvious that many of us are very focused on what happens after an RV. I am having dinner tonight with my professional investment councelor, who also happens to be an IRQD investor and close friend. I will have more info tomorrow morning about CRT and insurance investment vehicles.

I did speak to my councelor friend about an hour ago and he told me that one way to secure a CRT was to direct the donation to an "equity indexed annuity with guaranteed principal" I already have investments in a couple of these and have found that even as the stock market fizzled on and off, I still made money! I certainly do not plan to put all of my eggs in one basket but spread it around in a variety of tax free and tax deferred investments. With the equity indexed annuity your pricipal is guaranteed but you still have ties to various stock indexes, if the stock market is higher at your contract anniversary, you will be bench marked at that level. Minimum guarantee is 6% per year on my contract and caps at 13%. Please ask a professional councelor for absoloute info but this is the jist of what I know.

I hope that I am accurate but if anyone has some other info please post it as it will benefit all of us...

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fDyer, your summation is right on and if you think this part of the IRS code is hard to read, follow me to the parts about retirement plans for the really good stuff (LOL). The decision to allocate IQD with different holding periods is strictly up to the donor. Myself, yes I do have a CRUT (no shoemakers kid here), I want to contribute those IQD with the highest tax consequence depending upon how the IRS comes down on taxing the IQD. The one thing we can probably be sure of is the tax treatment will have to be contained in existing law, because with their current workload the IRS doesn't have time to get new regulations passed. Would you believe in the retirement plan area, we don't have 2009 reporting forms for a particular type of plan and the IRS says they won't be available until summer, the're due 07/31. To compensate we can use 2008 forms with 2009 dates. So we will be looking at capital gains tax treatment (short / long) or Section 988 Foreign exchange contract treatment which is ordinary income or collectible tax treatment which is 28% or some arcane procedure nobody has ever heard of. Don't know whether you got to see it but this CRT Q & A might be a little easier to digest.

GT ACE, you councilor friend sounds like he has got a good handle on risk management techniques inside of a CRT. One of the biggest planning advantages in a CRT, IMHO, is the ability to manage the investment portfolio to determine the ultimate tax rate the income beneficiary will pay on their distributions. In a time of uncertain tax treatments we like to have that arrow in the quiver. Ask your friend to show you how the 4-tiered trust accounting system works and how it uses "WIFO" (worst in - first out). If I looked around the office real hard I bet I could find some EIA-GP's in the client asset files. Interestingly enough if you have a 6% guarantee in your CRT investment account and your payout is 5%, you will never empty the bucket, in fact the water will rise and you will need another bucket.

Circular 230 requires that we state that this is not to be considered "PROFESSIONAL ADVICE" and IQD should consult with their personal financial advisors.

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Thanks GT Ace. Any insights you can share on tax shelters would be greatly appreciated. In return I'd be happy to talk with you about ways to prevent cancer! I know that is out of left field, but hey, we bring to the party what we can, right!? Thanks again for your post. I am a newbie to all of this and working as fast as I can to get myself an education. Perhaps we need to set up a site for each of us to share other good stock tips, tax tips, etc. God knows we could all use any good insights for how to keep our money in OUR OWN pockets! ;o)

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