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MillieChatham

Cashing in question

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A friend emailed me today the following, and I wondered if it is correct: Adam? Tax guys

"9When one goes in for a currency exchange at at bank one must inform the banker or anyone else you may happen to speak with when you get there that "you are here to EXCHANGE SOME CURRENCY."

You will be required to fill out Form FINCEN 104

You will also be presented with another form which uses the word INVESTMENT instead of currency exchange. If you sign this form you will be attesting to the fact that you are cashing in your investment

as opposed to making a CURRENCY EXCHANGE.

An investment of this type may be taxed as much as 36%.

A CURRENCY EXCHANGE may not be taxed.

If the bank insists you sign an 'investment" document politely but resolutely insist they provide a written statement that they are refusing to allow me to EXCHANGE an internationally tradable CURRENCY.

You can say my tax advisor is taking care of all the other forms. FINCEN104 is required."

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****////

 

Gee whiz... :o .. sounds good to us..... ^_^

 

but we started with the Martooni Hour early today on accounta the Budget Passing Party here, so.....

don't go by us,

 

but hey.... some DV brainiac'll check in and give us the 4-1-1 soon we hope!

 

Groovy little post, MILLIECHATHAM --- crazy interesting.....we like it...  

 

:partyhat: CHEERS, DOLL !  :partyhat: 

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ExecConsult - a member here at DV who is an estate planning attorney - has some great information here

 

http://whatisiraqidinar.com/dinar-income-tax-analysis

 

In a nutshell, he writes - "Be safe with the IRS – it is ordinary income under Section 988. Dinar investors should expect to pay 35% maximum federal tax rate as ordinary income following any income event with their dinar."

 

I will add the disclaimer - he is an attorney and not a tax consultant.  He has done some great research, but it is just his opinion.

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Thanks, Sarg..

Not being a tax guru (0r any guru for that matter except a kitchen maven, please hand me a skillet) I was certainly interested in what my friend emailed. I have known him since high school (0ver 50' years) and his is an honest and forthright as they come.

Now, let us discuss martoonis hous.

I don't know about

Do not inadvertently hit send.

Thanks Tankdude. Will follow up

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Lets make this simple, plan for and put away 35% of the money you make from Dinar.

 

Come next tax season, consult your own tax professional, attorney or both.

 

Spend the least you can, invest the most you can and save what you need for the future.

 

Just my take on the situation. :cigar:

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And just from my foxhole - for those of you who believe - 10% tithe.  I'm going to...

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A friend emailed me today the following, and I wondered if it is correct: Adam? Tax guys

"9When one goes in for a currency exchange at at bank one must inform the banker or anyone else you may happen to speak with when you get there that "you are here to EXCHANGE SOME CURRENCY."

You will be required to fill out Form FINCEN 104

You will also be presented with another form which uses the word INVESTMENT instead of currency exchange. If you sign this form you will be attesting to the fact that you are cashing in your investment

as opposed to making a CURRENCY EXCHANGE.

An investment of this type may be taxed as much as 36%.

A CURRENCY EXCHANGE may not be taxed.

If the bank insists you sign an 'investment" document politely but resolutely insist they provide a written statement that they are refusing to allow me to EXCHANGE an internationally tradable CURRENCY.

You can say my tax advisor is taking care of all the other forms. FINCEN104 is required."

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

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I would like to know where these tax rates come from.

Aren't they supposed to be based on your income or profit?

What if I bought IQD way back before it doubled in value and cashed it in, What would that rate be compared to if I bought IQD yeterday?

What if I reinvest all my profits?

I think everyone is going to have a diffent situation.

Thoughts?

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I would like to know where these tax rates come from.

Aren't they supposed to be based on your income or profit?

What if I bought IQD way back before it doubled in value and cashed it in, What would that rate be compared to if I bought IQD yeterday?

What if I reinvest all my profits?

I think everyone is going to have a diffent situation.

Thoughts?

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

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Lets make this simple, plan for and put away 35% of the money you make from Dinar.

 

Come next tax season, consult your own tax professional, attorney or both.

 

Spend the least you can, invest the most you can and save what you need for the future.

 

Just my take on the situation. :cigar:

I would say put away 38% (just to be safe) Then you will also need to put away some for the STATE tax (if I am not mistaken) so figure (round about ..unless you know for sure) 10% again just to be safe (can always spend the "tax leftovers" better safe than sorry)... all into a NON-INTEREST Bearing account..... 

 

Thats my   :twocents:

 

GO RV...HurRV

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I just want to chime in something real quick. Not to debate the potential to avoid taxes in any manner legal or not, but just to address the %s that keep getting mentioned.

1. 35% is not enough. Federal rate is going up to 39+

2. You also have to figure State tax. At the moment, WIsconsin is 7%, so we are at 39+7=45%.

3. There is also something out there that high income earners know about called AMT... Look it up. It adds a little "extra" to your tax rate depending on where you are in the system.

4. We could easily get hit with something else.... A windfall tax.

:twocents:

Bottom line my friends... Seek legal advice, plan on putting aside AT LEAST 50%, and good luck to us all.

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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.

 

Hey, Mark, what if it's a gift? Higher taxes, lower taxes? Need to report who the gift is from?

 

KK

One great thing about living in Texas - NO STATE TAX................. :)

 

You mean ANOTHER great thing about living in Texas?

 

KK

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Would rather give my taxes to Texas than the Federal government any day

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Hey, Mark, what if it's a gift? Higher taxes, lower taxes? Need to report who the gift is from?

 

KK

 

 

If you find $20 on the ground, you are technically supposed to report it as income and pay taxes at your income bracket.

 

Therefore, if it was a gift then you simply have no basis (cost) in the gain and the entire amount is taxable.

 

When my wife (CPA) explained that to me I was literally at a loss for words, which doesn't happen too often :lol:

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Would rather give my taxes to Texas than the Federal government any day

 

If you find $20 on the ground, you are technically supposed to report it as income and pay taxes at your income bracket.

 

Therefore, if it was a gift then you simply have no basis (cost) in the gain and the entire amount is taxable.

 

When my wife (CPA) explained that to me I was literally at a loss for words, which doesn't happen too often :lol:

 

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.

 

Hey, Mark, what if it's a gift? Higher taxes, lower taxes? Need to report who the gift is from?

 

KK

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

Edited by ExecConsult

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Is best to give 10% at one time, or set up an account and invest the money so the church would have a larger income for years to come?  Can some one help.

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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

 

I was scanning the responses to this thread just now and once again I was impressed with this response... thanks again for your contributions, Exec :twothumbs:

 

 

Is best to give 10% at one time, or set up an account and invest the money so the church would have a larger income for years to come?  Can some one help.

 

Henry, we have a thread in the VIP section where we are currently discussing exactly this subject. Here is the link: http://dinarvets.com/forums/index.php?/topic/147352-tithe-donating-dinars-to-church-etc

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of course you could always research OSI and prevent the heavy taxation.....surprised Adam didn't mention it......

 

I'm pretty sure I've brought it up a time or two :lol:

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