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KristiD

RV TAXED AS CAPITAL GAINS? COULD IT BE TRUE?

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There's been a discussion in another section about taxes on the gain from the RV.  I like Breitling and his buddy Bob Adams and they've been saying it will be taxed as Ordinary Income (37%), so I've assumed they were correct.  But it does nag at me that some people say their accountant assures them that it'll be Capital Gains (20%).  The difference is 17% (excluding any state taxes) and if there's a way for me to not pay that extra 17%, I want to find it.  I just noticed a comment from Xtaxman in that other thread and he is a retired CPA who says it should be treated as Gapital Gains.  Xtaxman was a high level accountant who specifically dealt with currency exchanges so his opinion held a lot of weight with me.  Still, with something this important, I need to see for myself exactly what the IRS has to say on the subject.  I had tried to research this before and couldn't find anything definitive.  But today I think I may have found something that will allow us to pay Capital Gains rates on our profits from the RV.  I'm not a CPA, although I do have two degrees in business and did study law and accounting, so I feel like I have at least some ability to understand this stuff.  But please, can any tax professionals comment on this?  Is this the authority we can give to an accountant who tries to tell us the gain will be taxed as Ordinary Income?

 

We bought the dinar as an "investment", which means its a "capital asset" and is subject to Capital Gains rates (and reported on IRS Form 8949).  I mean, they even list stocks and bonds as an example and investing in foreign currency is surely pretty close to that.  Could it really be this simple?  Is there any good reason why our dinar, which we bought as an investment, should NOT be considered a capital asset"?  Thanks!!

 

This is what the IRS says ( https://www.irs.gov/taxtopics/tc409 dated March, 2018):

Topic Number 409 - Capital Gains and Losses

Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, personal-use items like household furnishings, and stocks or bonds held as investments. When you sell a capital asset, the difference between the adjusted basis in the asset and the amount you realized from the sale is a capital gain or a capital loss. Generally, an asset's basis is its cost to the owner, but if you received the asset as a gift or inheritance, refer to Topic No. 703 for information about your basis. For information on calculating adjusted basis, refer to Publication 551, Basis of Assets. You have a capital gain if you sell the asset for more than your adjusted basis. You have a capital loss if you sell the asset for less than your adjusted basis. Losses from the sale of personal-use property, such as your home or car, aren't tax deductible. 

 

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