Why would I need a tax attorney post RV?

[Eddinar]

I hold 2M Dinar and I've read a few posts about needing a tax attorney. Can someone shed some light about why one needs a Tax Attorney post RV and the benefits for hiring one? Thanks and I appreciate everyone's feedback.

[Trimark]

A Tax attorney will keep you from paying more to Uncle Sam than you need to and also to keep you from getting yourself in trouble without realizing it.

For example, some people plan on giving 25,000 notes to friends and family .... well ... that's very nice but there is a right way to do that and a wrong way. If you just give them the notes after the RV, you are giving them $25,000 (assuming a $1 RV).

You are only allowed to give $13,000 tax free in 2010 so you would owe gift tax on the $12,000. For 2010 the gift tax owed is the highest individual tax rate which is 35%. So, giving the gift of the 25,000 note would cost you not only the note but also $4200. If you give out a lot of those notes, you could be paying out more in taxes than you anticipate. In 2011 the gift tax rate is scheduled to go back up to 55%.

That is just one of the ways that you can get in trouble without realizing it. Another big one is 10% to charity. There is a way to do it that can save you in taxes and a way you can do it so you owe more than you need to.

I think a tax attorney is VERY important for everyone who holds a decent amount of dinars. If you get one, make sure to get one that specializes in tax. You don't want to go to one that does everything - criminal, civil, etc. You want to go to one that only does tax law as they will be up on the various tax codes where general practitioners probably won't be.

[Eddinar]

Thanks for the feedback Trimark...I appreciate it.

[super]

A Tax attorney will keep you from paying more to Uncle Sam than you need to and also to keep you from getting yourself in trouble without realizing it.

For example, some people plan on giving 25,000 notes to friends and family .... well ... that's very nice but there is a right way to do that and a wrong way. If you just give them the notes after the RV, you are giving them $25,000 (assuming a $1 RV).

You are only allowed to give $13,000 tax free in 2010 so you would owe gift tax on the $12,000. For 2010 the gift tax owed is the highest individual tax rate which is 35%. So, giving the gift of the 25,000 note would cost you not only the note but also $4200. If you give out a lot of those notes, you could be paying out more in taxes than you anticipate. In 2011 the gift tax rate is scheduled to go back up to 55%.

That is just one of the ways that you can get in trouble without realizing it. Another big one is 10% to charity. There is a way to do it that can save you in taxes and a way you can do it so you owe more than you need to.

I think a tax attorney is VERY important for everyone who holds a decent amount of dinars. If you get one, make sure to get one that specializes in tax. You don't want to go to one that does everything - criminal, civil, etc. You want to go to one that only does tax law as they will be up on the various tax codes where general practitioners probably won't be.

Trimark, we gave the dinar note to family approximately two years ago, and your saying that we are going to have to pay taxes on money we gave away before RV thats worth less than $25? Sorry that don't make sense to me! Edited August 9, 2010 by super

[mich2ga]

This was an excellent question. But I would like to take it a little bit further. I have heard that I will have to pay taxes on my money once the rv happens.

Could someone please tell me if this is true, as well as the reason why?

[rjboots1]

mich2ga, you will definitely have to pay taxes on your money. And if I might add, you can give notes away right now, and not end up paying gift tax, you just need to document the date of the gift and have it signed by the recipient, and then the recipient will be liable for the taxes once they cash in. The only question I have is whether we will pay capital gains rates, either short or long term depending on how long we've owned it, or whether it will be taxed as regular income. I actually have a printout of the tax code that says all foreign currency transactions are taxed as regular income, and I was given those copies by an attorney that told me it would be taxed as such. But everyone else I've heard on here in the last 6 months seems to think otherwise, but no one has based that on any documentation that I have seen. Any helpers out there?

Edited August 9, 2010 by rjboots1

[mich2ga]

Thank you rj. I believe what you said about capital gains is what i was trying to find out.

[Eddinar]

I emailed my Accountant about 2 months ago and I explained him we had invested in the Iraqi currency. I asked him how much taxes would be taken out and he said 15% only. He also said it would go up to 20% in 2011 due to obama. Cap gains is all we would pay. I own a business and have had my accountant for years and he is very knowledgeable. He has had his accounting firm for 30+ years so I trust him.

I emailed my Accountant about 2 months ago and I explained him we had invested in the Iraqi currency. I asked him how much taxes would be taken out and he said 15% only. He also said it would go up to 20% in 2011 due to obama. Cap gains is all we would pay. I own a business and have had my accountant for years and he is very knowledgeable. He has had his accounting firm for 30+ years so I trust him.

[kingfish]

Thanks for the post!

[JenGirl321]

Trimark, we gave the dinar note to family approximately two years ago, and your saying that we are going to have to pay taxes on money we gave away before RV thats worth less than $25? Sorry that don't make sense to me!

I believe that Trimark was saying you will have to pay the tax if you give the $25,000 note away AFTER the RV. This would be because if the RV is 1:1 you would be giving away $25,000. Only $13,000 of which is tax free. So you would then be paying the 35% tax on the remaining $12,000 which would equal $4,200 in taxes. However, if you gave the 25,000 Dinar note while it was worth just over $20 then you won't be taxed because you are well under the $13,000 limit for the 2010 year.

[LittleMissGrits]

mich2ga, you will definitely have to pay taxes on your money. And if I might add, you can give notes away right now, and not end up paying gift tax, you just need to document the date of the gift and have it signed by the recipient, and then the recipient will be liable for the taxes once they cash in. The only question I have is whether we will pay capital gains rates, either short or long term depending on how long we've owned it, or whether it will be taxed as regular income. I actually have a printout of the tax code that says all foreign currency transactions are taxed as regular income, and I was given those copies by an attorney that told me it would be taxed as such. But everyone else I've heard on here in the last 6 months seems to think otherwise, but no one has based that on any documentation that I have seen. Any helpers out there?

I googled IRS currency and found reading that stated if you made more than $200 on currency exchange that was used for travel or that you purchased (even if it was in the course of doing business) it would be taxed as cap. gains. I would assume most on here would fall into this category. This issue did not address professional currency traders.

I emailed my Accountant about 2 months ago and I explained him we had invested in the Iraqi currency. I asked him how much taxes would be taken out and he said 15% only. He also said it would go up to 20% in 2011 due to obama. Cap gains is all we would pay. I own a business and have had my accountant for years and he is very knowledgeable. He has had his accounting firm for 30+ years so I trust him.

I emailed my Accountant about 2 months ago and I explained him we had invested in the Iraqi currency. I asked him how much taxes would be taken out and he said 15% only. He also said it would go up to 20% in 2011 due to obama. Cap gains is all we would pay. I own a business and have had my accountant for years and he is very knowledgeable. He has had his accounting firm for 30+ years so I trust him.

Is there an echo in here? Maybe stereo!! Just kidding!

[Eddinar]

I googled IRS currency and found reading that stated if you made more than $200 on currency exchange that was used for travel or that you purchased (even if it was in the course of doing business) it would be taxed as cap. gains. I would assume most on here would fall into this category. This issue did not address professional currency traders.

Is there an echo in here? Maybe stereo!! Just kidding!

2 funny....i hit the reply button twice.....

[Trimark]

Trimark, we gave the dinar note to family approximately two years ago, and your saying that we are going to have to pay taxes on money we gave away before RV thats worth less than $25? Sorry that don't make sense to me!

How does the IRS know you gave the dinar away two years ago? Do you have proof? If not, you will want to get it. Otherwise the IRS just has your word that you gave it away two years ago. Their motto is guilty until proven innocent so my belief is that if you are going to give away money before the RV you should document it.

Also, cap gains can be short term or long term. If you hold the dinars for more than a year (which again will need to be proven) then you get the long term cap gains rate of 15% in 2010. Short term capital gains are taxed at the individual's tax rate which if the dinars RV for a decent amount will be the high rate of 35% in 2010.

One other thing I forgot to add about giving away a 25,000 note after the RV - you will also owe tax on the 25,000 you are giving away. So, you will owe tax first on the 25,000 PLUS the gift fee tax of $4200. If you have held the dinar for less than a year you will owe fed tax of $8750 plus the $4200 for the gift tax. The 25,000 you are giving away will cost you about $13,000. If you owe state tax the cost will be more.

This is why a tax attorney is so important. If you aren't careful with your gifts you could find that the taxes owed on your gifts take a much bigger chunk of the money you had planned to enjoy yourself than you expect.

[mryoungandme]

After RV are we going to need a tax attorney and a cpa or will one do if only one which one would I need more?

[Trimark]

After RV are we going to need a tax attorney and a cpa or will one do if only one which one would I need more?

IMO, it depends on how much money you have from the RV and what you want to do with your money. If you are just going to cash out your money and stick it in a bank then probably just a CPA will do. If you plan to give away gifts to individuals, give money to charity, set up anything offshore, exchange currency for gold or other currency, etc. then I think a tax attorney is essential.

I would also see these people BEFORE cashing out as you could end up paying taxes that you don't really need to pay if you just cash out without having a plan in place. This is probably the most money any of us will ever have at one time. It's important to be smart about it and not pay more in taxes than you have to.

[Freedom Fighter]

Do I have to pay tax to the IRS on capital gains?

Yes, you must report capital gains on your tax return. Almost everything you own and use for personal purposes, pleasure, or investment is a capital asset. When you sell or trade a capital asset, generally the difference between the amount you paid for it and amount you sell or trade for it is a capital gain or capital loss that must be reported on your tax return.

Capital gains and capital losses are classified as long term if you’ve held the property for more than one year or short term if you’ve held the property for one year or less.

Type of Capital Asset Holding Period Tax Rate

Short-term capital gains (STCG) One year or less Ordinary income tax rates up to 35%

Long-term capital gains (LTCG) More than one year 5% for taxpayers in the 10% and 15% tax brackets

15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets

These rates are based on your ORDINARY INCOME TAX RATES (or tax Brackets) before the schedule D is filed so based on your current income not including the RV/RI exchange.

Ordinary taxable income brackets for use in tax planning and filing 2010 tax returns due April 15, 2011.

2010 tax rates

Tax rate(Brackets)/ Single filers/ Married filing jointly/ Married filing separately/ Head of household

10% / Up to $8,375 / Up to $16,750/ Up to $8,375/ Up to $11,950

15%/ $8,376 - $34,000/ $16,751 - $68,000 / $8,376 - $34,000/ $11,951 - $45,550

25 %/ $34,001 - $82,400/ $68,001 - $137,300/ $34,001 - $68,650/ $45,551 - $117,650

28%/ $82,401 - $171,850/ $137,301 - $209,250/ $68,651 - $104,625/ $117,651 - $190,550

33%/ $171,851 - $373,650/ $209,251 - $373,650/ $104,626 - $186,825/ $190,551 - $373,650

35%/ $373,651 or more/ $373,651 or more/ $186,826 or more/ $373,651 or more

So your tax rate is 1st based on long or short term then based on your ORDINARY INCOME TAX RATE. So short term you will pay from 0% to 35% depending on your tax rate without the sale of your Dinars. And long term will pay 5% or 15% again depending on your tax rate or bracket before the Dinar exchange.

All these rates will go up if you cash in after 2011 as Bush's tax cuts expire. I hope this helps. GO RV/RI 2010!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Do get a good CPA/ Tax Attorney

SORRY COLUMNS DIDN'T LINE UP !!!

Edited August 10, 2010 by Freedom Fighter

[markisuncfan]

whats sad......when the tax code was created, except for C Corps, there was a thing called no double taxation. Now, if you look to see exactly how many times you are taxed on the money you earn...it should turn your stomach over and over. Everything you do is taxed, seven ways from Sunday. Sorry...cold hard truth.

[Doc31]

Trimark ... thanks for the post and trying to help folks.

[djw]

If you have already bought the dinars you will pay taxes, but if you plan on buying, or better yet get a self directed Roth IRA, fund it to the max yearly, eventually you can instruct the IRA to buy any investment you want as long as it goes thru the the Roth any income after you reach 591/2 and account has been open 5 years you pay no taxes. I have been buying real estate now for 20 years, rents go back in the IRA until 591/2, i am 57 now, then draw out tax free income for life as long as rents go back in first thru IRA

[Trimark]

YW Doc.