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Info from Bob the Tax Man

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2-26-2019   Guest Guru BobTheTaxMan   For those of us who have been riding this cotton picking train of the dinar for so long you couldn’t get a better tax opportunity than we have now.  It’s just absolutely freaking amazing what we have.  The new rules brought in under the Trump Administration give us so much leeway and so much opportunity to be able to save on taxes, to share this with everyone we love, less consequences.  The whole tax planning game has changed immensely because of the changes in 2018  and 2019…As Paul Harvey used to say, “Here’s the rest of the story.”  There are some things about the IRS, particularly those who come into a lot of money in a hurry that have certain triggering points.  I’ve got three of those I want to talk to you about. 

 

2-26-2019  Guest Guru BobTheTaxMan    1.  I have had a lot of people send me email saying, “ This person is saying this is going to be capital gains and NOT be ordinary income.”  I’ve even been sent long convoluted processes someone has created for being able to move money in different ways so that the categorization was redone.  I’ll tell you from my own studies, one of the things when I got into this thing over a decade ago…I spent a lot of time researching it.  I contacted Several of my financial advisors who worked with their tax attorneys.  I got the leading CPA of the east coast who deals in Foex currency exchanges and his research came up with the exact same thing that the attorneys came up with.  And that is there are two ways that people might misconstrue that this is supposed to be taxed as capital gains. I can tell you right now from the research they did and my own research the dinar does NOT qualify.  

 

 

(More posts from Bob the Tax Man to follow.  They are posted a little at a time on Dinar Guru.)

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Part 3:

 

2-27-2019  Guest Guru BobTheTaxMan   It does not qualify [reference post 2] …I’m going to make it real simple for you.  My research has shown this…It’s going to be treated as ordinary income and that’s that.  Now, what would happen if you elected to do it as capital gains and file your return?  Here’s what will happen…if you are incorrect and it comes back it will take two years before you hear from them.  The amount of penalties and interest that is going to be accumulated over that two year time frame is…going to be big.  So you have a choice.  On my side I tell people treat it as ordinary income.  Yeah you’re going to pay more taxes.  That’s true you’re going to pay more taxes on it but I do know this much, within 3 years, because you have three years to amend that return to get money back, within three years somewhere along the line someone is going to get a Letter of Definition from the IRS that definitively says this is how we’re taxing it...and/or there might be rule changes in the IRS that converts this from ordinary income to capital gains.  That might happen.  I’ve seen it before. 

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Part 4:

 

2-27-2019  Guest Guru BobTheTaxMan   …But my suggestion would be don’t mess with it.  take the conservative side.  File it as ordinary income.  Pay your taxes that’s on it.  And keep your ear to the ground.  Any kind of new changes that are going to come out in this particular arena the dinar crowd is going to pick it up and run like crazy with it.  But most importantly if you have a half decent attorney or CPA who’s familiar with Forex they’re going to say “Guess, what?!”  and then you go back and amend the return.  So if you amend the return.  You’ll get back the amount of money you didn’t have to pay taxes on PLUS you’ll get interest from the federal government and if your state…has an income tax they have to pay you interest as well.  Hmmm…sounds like a good plan to me.  The thing I like about it is that I don’t want to have to walk around downtown looking over my shoulder worrying about the IRS getting on my case….My invitation is to realize that if you elect to file capital gains you’re walking the line.  That line could turn and snap you.  If it does snap you it’s going to cost you more money If you take the line and be more conservative and pay it as ordinary income whatever initial taxes you paid you have three years to recover.  And within three years they’ll be some sort of an answer that will be well known…let it go.  I assure you you’ll be a lot happier… 

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So what I don't understand is How this can be Ordinary Income....I/We Bought it years ago....It wasn't paid to us by anyone....We bought into this as a Long Term Investment that has done nothing....No Income/Gain what so ever in years, so how can it be deemed Ordinary Income....At this point to say the least it is a wash or a loss but you can't claim that. 

 

Just saying,

 

Karsten

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28 minutes ago, Karsten said:

So what I don't understand is How this can be Ordinary Income....I/We Bought it years ago....It wasn't paid to us by anyone....We bought into this as a Long Term Investment that has done nothing....No Income/Gain what so ever in years, so how can it be deemed Ordinary Income....At this point to say the least it is a wash or a loss but you can't claim that. 

 

Just saying,

 

Karsten

 

I feel the same way.  In my mind, it's long-term capital gains, but people have all sorts of opinions about how this is going to be taxed.

I thought I'd post what this fellow says as they said they are posting his thoughts a little at a time.  I'll keep posting till he finishes what he has to say.  This way, we can have his opinion.   I, myself, feel that XTaxGuy is right about this (long-term capital gains), but who really knows what the IRS will do?

 

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Part 5:

 

2-28-2019   Guest Guru BobTheTaxMan  2.  …tax planning is absolutely critical…if you run out and cash in all this dinar three things are going to happen.  ONE:  You have to make dang sure when you cash in that dinar that you pay your taxes on it.  Don’t let it get away from you.  Calculate it.  Pay it up front.  Pay it quarterly.  Pay it monthly.  When you go get money out of the bank, pay taxes.  Just do it.  That way you don’t have to worry about it.  TWO: Realize if you pull a lot more money and show on your tax return than what you ordinarily would have, you have lined yourself up for an audit. Part of the tax planning is…where do you draw the line?  How much do you really need?  What tax bracket do you want to live in? 

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Part 6:

 

3-1-2019  Guest Guru BobTheTaxMan  …And is it really worth cashing in all this dinar and ending up with this huge amount of capital and finding yourself under the gun scope of the IRS.  If you have an exorbitant amount of income that show up, I mean a great big chunk, you can justify it, that’s not the problem at all, but I promise you if they audit you and you have not paid your taxes on it they are going to hit you with penalties and interests And it’s going to be huge.  Just be aware.  If you take a lot out and your tax returns jump way up high you might set yourself up for an audit.  Plan on it.  It’s going to happen.  THREE:  One of the amazing blessing that’s come from 2018 to 2019 taxes is the simple fact that in the past Schedule A  which is where you put your itemized deductions and report your charitable contributions had limitations on it.

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Part 7:

 

3-2-2019  Guest Guru BobTheTaxMan  …If you made over a certain amount of money you did not get to use Schedule A.  Period.  That got taken out for 2018.  There are no limits…Now charitable contributions: have been in the 30% to 50% allowable depending on your income.  Now that’s changed.  In 2019 it went from 50% to 60%.  This means a whole massive amount of tax liability that would have occurred because of having this money you can write off as charitable contributions.  Wow!  That is freaking awesome!  But you also need to remember…

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Part 8:

 

3-3-2019  Guest Guru BobTheTaxMan  if you show a huge amount of charitable contributions that actually exceed your income it’s going to get audited.  You can plan on it…good tax planning always has good records.  As long as you are compliant with the rules and regulations imposed by the IRS you do not have to fear it…I think it’s absolutely phenomenally marvelous the changes that have got on for 18 to 19 which makes this investment we are all involved in, wow, it’s just a huge huge blessing.  It’s going to be great!  But you need to look at the other side of the coin.  This is what the IRS is going to be looking for.  Be prepared.  Play the game.  And you will win. 

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My husband, Bob, who is a CPA, MBA, CFO of his company feels that this investment definitely falls into capital gains category and should be taxed accordingly.

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