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Fox News is reporting, President Trump is going around DemoRats in the House , cutting capital gains tax in half. I was under the impression that was how we would pay our taxes on any currency windfall!! This would be fantastic, if our great President Trump could pull this off! JMHO!

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What?!?!?! Why would this be an issue? Unless...........

 

Just speculating.  Lol

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Here we go again . . . I was informed ( about a year ago ) by a pretty savvy tax accountant we would be taxed at the regular earnings level. Of late, I've been going much further afield for the info.

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exchanging one currency for another one should not even be taxed :

in Costa Rica numerous times,  nobody said anything :

and there is no proof regarding what you paid for your IQD  

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45 minutes ago, 10 YEARS LATER said:

Here we go again . . . I was informed ( about a year ago ) by a pretty savvy tax accountant we would be taxed at the regular earnings level. Of late, I've been going much further afield for the info.

That’s the problem I heard from different tax people that have the same view as your guy, then I have heard it would be taxed as a capital gains. I just thought it was interesting that this is being talked about now, when it looks like a very good window of opportunity for an adjustment in rate on the IQD! I’m just going to take Adams advice on what to do as far as tax liability is concerned! JMHO 

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1 hour ago, one2one said:

exchanging one currency for another one should not even be taxed :

in Costa Rica numerous times,  nobody said anything :

and there is no proof regarding what you paid for your IQD  

Yes no tax until your convert to usd...u Lea your money is and stays in Iraq then it’s 15%

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15 hours ago, Artitech said:

Fox News is reporting, President Trump is going around DemoRats in the House , cutting capital gains tax in half.

Can you provide a link?  I searched for this and couldn't find anything...

 

This is now one of my favorite subjects here at DV because I've switched my position on it thanks to what I learned here in the last sixe months from two previous threads here.  I now think we have a good case to claim the RV profit as Capital Gains.  I believe the max rate for Ordinary Income is 37% and for Capital Gains it is 20% (and if we're lucky and that gets cut in half, potentialy 10%).  (And this is all federal tax - any state tax is additional.)  So this is a very important question - do I pay an extra $.17 on every dollar of gain from the RV - or not?   It's such an important question that I think it would behoove everyone to read the previous two threads on this subject:

 

Personally, this is what I've concluded.  Full disclosure, I am NOT an accountant or a licensed tax professional, so I really have no standing to help anyone else.  I'm just sharing what I've decided for myself....

 

The thing is, the tax code is just not clear about this RV situation.  Even CPAs cannot agree on whether the RV gain is Ordinary Income or Capital Gains; some say one, the rest say the other.  I'm a big fan of Breitling and I worked with Bob Adams, his CPA partner, in one of his investment groups.  Adams is a good man and a very competent CPA who has researched the RV thoroughly and believes wholeheartedly that it is Ordinary Income.  But there is a long time DV member who was a managing partner at a big CPA firm (and this is a big deal) and who specifically dealt with large currency exchange gains for a major company, and he says the RV gains should be treated as Capital Gains.  According to the ex tax man, if we hold our dinar as an "investment" (which I know I do), then it is Capital Gains. (You can read the first thread from December to find more specifics on what the ex tax man had to say about this.  It's also worthwhile to search through and read all of his posts because he has given some great information about this topic.)  So I decided the key might be the term "investment" and I researched what the IRS had to say about it.  Below I've copied what I found.  (I put some of the pertinent information in red). 

 

I think Adams is doing what he thinks is right, but I also think that the ex tax man, who has significant expertise in this particular area, gives some very specific and relevent information.  If you read all that he's said (just look him up in the Members section and read his comments), he even tells you specifically why he things the CPAs that believe it should be Ordinary Income, are wrong.  To me, he made his case and I so I switched position on this.  The current tax codes are just so ambiguous about this subject that not even licensed tax professionals can agree on how to treat these type of gains.  At some point in the future, I think it's likely that the IRS will specifically address this specific situation.  But until then, if I use a  reputable CPA, whose professional opinion is that these gains should be treated as Capital Gains, I just don't see the IRS trying to insist that I owe them penalties, fines and/or late fess when it was their fault that they didn't issue specific enough guidelines for tax professionals to definitively know what to do.  Of course there's a risk that I could be wrong since we know the IRS does a lot of things it shouldn't be doing.  And if the IRS does try that in the future, at least then I'll have the financial resources to fight back, and I would think a potential class action lawsuit along with other dinar investors who are in the same position.  So, as of now, this is the route I've decided to take.  You all have to decide for yourselves.  This is just fyi for anyone who's interested.

Topic Number 409 - Capital Gains and Losses   https://www.irs.gov/taxtopics/tc409 

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.

Short-Term or Long-Term

To correctly arrive at your net capital gain or loss, capital gains and losses are classified as long-term or short-term. Generally, if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. For exceptions to this rule, such as property acquired by gift, property acquired from a decedent, or patent property, refer to Publication 544, Sales and Other Dispositions of Assets; or for commodity futures, see Publication 550.pdf, Investment Income and Expenses. To determine how long you held the asset, you generally count from the day after the day you acquired the asset up to and including the day you disposed of the asset.

 

 

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@KristiD

 

I totally agree that this will be a long-term capital gain.

 

I'm not a tax professional either, but this is the only thing that makes sense to me.  How can anyone say this is "ordinary income" when we have been holding on for years and years in hopes of making a profit?  That is, by definition, an investment.  😊

 

 

 

 

 

Edited by Floridian
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Only time will tell......?

 

My belief......no tax.....

 

Here's why.......first off the USG holds enough IQD to do what they wish after a rate change......pay debt down....infrastructure....the wall........after all.....Bush claimed the war would pay for itself....

 

Trump believes in free Enterprise and Capitalism and my belief is he would let the money flow naturally to stimulate the country.....

 

If Clinton or Obama had been in office there would have been a 95 percent  windfall tax.....so the government could figure out how to best take care of the citizens.....that's just how the left works......     JMO.     CL

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8 minutes ago, coorslite21 said:

Only time will tell......?

 

My belief......no tax.....

 

Here's why.......first off the USG holds enough IQD to do what they wish after a rate change......pay debt down....infrastructure....the wall........after all.....Bush claimed the war would pay for itself....

 

Trump believes in free Enterprise and Capitalism and my belief is he would let the money flow naturally to stimulate the country.....

 

If Clinton or Obama had been in office there would have been a 95 percent  windfall tax.....so the government could figure out how to best take care of the citizens.....that's just how the left works......     JMO.     CL

 

CL, I love your opinion.   :D

Why do you believe the USG holds a lot of IQD?

I think so too, because of old NY Times article entitled "Billions Over Baghdad".

Do you have another or a different reason?

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4 hours ago, KristiD said:

Can you provide a link?  I searched for this and couldn't find anything...

 

This is now one of my favorite subjects here at DV because I've switched my position on it thanks to what I learned here in the last sixe months from two previous threads here.  I now think we have a good case to claim the RV profit as Capital Gains.  I believe the max rate for Ordinary Income is 37% and for Capital Gains it is 20% (and if we're lucky and that gets cut in half, potentialy 10%).  (And this is all federal tax - any state tax is additional.)  So this is a very important question - do I pay an extra $.17 on every dollar of gain from the RV - or not?   It's such an important question that I think it would behoove everyone to read the previous two threads on this subject:

 

Personally, this is what I've concluded.  Full disclosure, I am NOT an accountant or a licensed tax professional, so I really have no standing to help anyone else.  I'm just sharing what I've decided for myself....

 

The thing is, the tax code is just not clear about this RV situation.  Even CPAs cannot agree on whether the RV gain is Ordinary Income or Capital Gains; some say one, the rest say the other.  I'm a big fan of Breitling and I worked with Bob Adams, his CPA partner, in one of his investment groups.  Adams is a good man and a very competent CPA who has researched the RV thoroughly and believes wholeheartedly that it is Ordinary Income.  But there is a long time DV member who was a managing partner at a big CPA firm (and this is a big deal) and who specifically dealt with large currency exchange gains for a major company, and he says the RV gains should be treated as Capital Gains.  According to the ex tax man, if we hold our dinar as an "investment" (which I know I do), then it is Capital Gains. (You can read the first thread from December to find more specifics on what the ex tax man had to say about this.  It's also worthwhile to search through and read all of his posts because he has given some great information about this topic.)  So I decided the key might be the term "investment" and I researched what the IRS had to say about it.  Below I've copied what I found.  (I put some of the pertinent information in red). 

 

I think Adams is doing what he thinks is right, but I also think that the ex tax man, who has significant expertise in this particular area, gives some very specific and relevent information.  If you read all that he's said (just look him up in the Members section and read his comments), he even tells you specifically why he things the CPAs that believe it should be Ordinary Income, are wrong.  To me, he made his case and I so I switched position on this.  The current tax codes are just so ambiguous about this subject that not even licensed tax professionals can agree on how to treat these type of gains.  At some point in the future, I think it's likely that the IRS will specifically address this specific situation.  But until then, if I use a  reputable CPA, whose professional opinion is that these gains should be treated as Capital Gains, I just don't see the IRS trying to insist that I owe them penalties, fines and/or late fess when it was their fault that they didn't issue specific enough guidelines for tax professionals to definitively know what to do.  Of course there's a risk that I could be wrong since we know the IRS does a lot of things it shouldn't be doing.  And if the IRS does try that in the future, at least then I'll have the financial resources to fight back, and I would think a potential class action lawsuit along with other dinar investors who are in the same position.  So, as of now, this is the route I've decided to take.  You all have to decide for yourselves.  This is just fyi for anyone who's interested.

Topic Number 409 - Capital Gains and Losses   https://www.irs.gov/taxtopics/tc409 

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.

Short-Term or Long-Term

To correctly arrive at your net capital gain or loss, capital gains and losses are classified as long-term or short-term. Generally, if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. For exceptions to this rule, such as property acquired by gift, property acquired from a decedent, or patent property, refer to Publication 544, Sales and Other Dispositions of Assets; or for commodity futures, see Publication 550.pdf, Investment Income and Expenses. To determine how long you held the asset, you generally count from the day after the day you acquired the asset up to and including the day you disposed of the asset.

 

 

Thanks for your question on a link. I don’t have one. This was scrolling on the bottom of screen. I think I was watching the Judge Jeanee show. When it scrolled across the bottom of screen. One thing I left off it said was President Trump was going to use executive power to go around the DemoRats. He was checking to make sure it was legal ! If he got the go ahead legally it was a done deal! I thought that was big news, as like you, I think I read here that same article, you posted. I know I have heard Breitling talk about it. Like I say I have heard it from both camps. I like, you hope it’s taxed as capital gains! I have also heard rumors that President Trump holds a large amount of dinars! This could be the reason, this is sorta coming out of the blue. JMHO. Just think of the stimulus this tax cut could provide our economy! Thanks for weighing in on this too! This what I like about this site there are a lot of very smart people here! I am going to investigate this further! This could be very important information for us next month! JMHO!

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Under normal circumstances if you buy/sell currency on a trading platform for a profit it is either short-term capital gains or long-term capital gains, depending on how long you held the position.  Some options contracts are a split taxation of short and long-term.  

Why physical paper currency would be treated as ordinary income instead of capital gains I do not know.  I'm inclined to think you could claim it as long-term capital gains so long as you had some proof of purchase date and price to back that up in case you were audited. 

Your ordinary income tax rate will vary based on your income level and deductions, anywhere on a scale from 0% to 37%, whereas capital gains is a flat rate regardless, so if someone had a low income to start with and only made a modest amount on dinar, they might be able to declare it as ordinary and not pay as much.

NOT A CPA OR A TAX PLANNER, JUST MY 2 CENTS

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Simple, currency is an asset, when your conduct exchange depending on currency you make capital gain or loss...if your American as soon as you exchange dinar into usd you hopefully will make a gain..

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