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Legal Considerations

ExecConsult

By ExecConsult,
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ExecConsult Newbie

ExecConsult

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Hi. My real name is Mark. I am an estate planning attorney. My intention here is to give some pointers on tax, structured gifting, charitable interests, and other estate planning issues you may have to deal with regarding any sudden increase of wealth due to an RV.

INCOME TAX

Taxes on the appreciation of this money will be taxed as ordinary income. It will be listed on your tax return as "interest income." The income is only recognized when you cash out. The income is figured by the amount you receive less the original cost of the Dinar and any fees associated with the original purchase.

Depending on your state's income taxes, you may wish to create an irrevocable trust in a state that does not have income taxes and place the Dinar in that trust. The trust would pay federal income taxes, but you would avoid the state income tax. You will have to weigh your potential savings against the legal fees that would require and decide for yourself if it is worth it.

If you have charitable interests at all, you could also give the Dinar to a charitable trust after the RV, have the trust sell it, and avoid all taxes completely. However, there are things you lose with this tactic as well. These issues should be well thought out with competent counsel.

GIFTING

If you are planning on giving any of your wealth away, these are things you should consider:

Gifting - Tax

Gift tax is paid by the person giving the gift on any gift (or combination of gifts) made in any given year to a single individual (or entity) if the amount of the gift(s) exceeds $13,000. This is the gift tax "exclusion" amount. If your spouse joins you in the gift, you can also add your spouse's exclusion amount for total gifting of $26,000 to any individual in any given year. (This is why you don't have to fill out a gift tax return for every birthday party you ever threw.)

Once you pass the exclusion amount, you start working under the "exemption" amount. Under current law there is a credit for gift taxes that will allow each of us to give up to a lifetime amount of $1,000,000 without any out of pocket expense. Once you have make the gift, you fill out form 709, figure the tax, claim the credit, send it in and you are done. However, there is a potential DOWNSIDE to using your gift tax exemption. For every dollar of gift tax exemption used during life, you lose one dollar of estate tax exemption for when you pass on.

The following are exempted from gift taxes regardless of the amount:

-Gifts for education expenses made directly to the educational institution

-Gifts for medical expenses made directly to the medical institution

-Gifts to charitable and not-for profit entities

Gifting - Timing - Pre RV

Right now the Dinar aren't worth much and you can give them away without exceeding the exclusion amount. However, to claim the exclusion amount the gift must be a "completed gift." That means that you are not just pledging the Dinar, but you have actually given it away so you can't get it back. I know that many of the people we wish to give to probably wouldn't do well with large sums of cash after an RV. (My kids would all own fast cars if they could.) Your gift may be placed in an irrevocable trust with your intended gift receiver(s) as a beneficiary and lots of restrictions on how and for what any distributions should be made. That way, if the RV comes, your grandchildren could end up with school paid for instead of parties paid for. (You may also use well structured limited business interests to pass on wealth but keep control of it.)

Gifting - Timing - Post RV

I personally would NOT gift prior to the RV because I am not that worried about the gift tax and I'd like to know exactly what I am dealing with. There are sooooo many things that can be done to pass on wealth in constructive ways that will still avoid gift taxes. I don't have the time to go into them here (and you wouldn't read it all anyway). There are lots of ways to take care of those you love without gift (or estate) taxes becoming a problem. Some of these include:

-Tying in charitable interests

-Discounting assets

-Carefully structured gifting using Crummy Powers with multiple beneficiaries (who will never receive) to funnel funds to the real beneficiaries

-Captive Insurance (if you have OR START a business)

However, fore each of these tactics legal expenses would be incurred.

Estate Tax

As the law stands right now, if you die after 2010 your estate will have an exemption amount of only $1,000,000 (adjusted for inflation). Any amount above that will be taxed at about 50%. If you have used some of that exemption through gift taxes, your estate tax exemption will be even lower.

If you are married, you should make sure that your Revocable Living Trust has appropriate tax provisions that allow your estate to use both of your exemptions (effectively doubling the amount). This can not be done under current law unless you have trust based planning.

ASSET PROTECTION

Once you have money, you become one of those people we have all heard of who have "deep pockets." There are over 16,000,000 law suits filed in the US in a year. That is more than 1 lawsuit every 2 seconds. You will have a target. There are five general tiers to Asset Protection:

1) Whatever protection state law provides

2) Insurance

3) Business entities (LLC, FLP, etc....)

4) Domestic Asset Protection Trusts

5) Foreign Asset Protection Trusts

I am only scratching the surface here. Unfortunately, many of you will now go on the internet or talk to friends about this tiny bit of information I have given and get a mix of good and bad information. It is my hope that many of you will also seek competent counsel and get only good information that is fine tuned to your personal circumstances. If you need recommendations for good attorneys to work with, I can get them for you.

If it were me personally, I'd wait until after the RV so that I knew what I was dealing with. However, depending on your circumstances, that may not be the correct course of action for you.

I am not going to give you all hours of unpaid legal advice. However, I will do my best to answer simple, general questions for you.

Best of Blessings to you all.

Simplified Version of Disclaimer

None of the foregoing information can be considered legal advice and I have not created an attorney client relationship with you. Pursuant to circular 230 none of the information contained in this post may be used to avoid tax penalties.

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Drstain Newbie

Drstain

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Posted

Excellent! Thank you Mark very much for sharing. I have already spent a considerable amount with attorneys and CPA's and your comments are definitely inline with what I have been told. I know this will be a huge benefit to those who read your recommendations. Best always!

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whipper56 Newbie

whipper56

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Posted

Just want to throw something out there........... Does anyone really think the bank or who ever you exchange your dinar with really care where you got them from ??? Does your bank ask you where you got the $1,000.00 you just deposited into your acct.??? NO.... Why would anyone have to show proof where they got their dinars from. Who is going to find out you JUST GAVE your friend 500K before he / she went to the bank to exchange them. " I " do not have every receipt for all my dinars. AND, I'm sure the bank OR IRS doesn't care as long as they get the tax $$$ from WHO EVER cashes them in. I, dont see this GIFTING letter and all this leagle stuff as a BIG thing. I for one am going to just give away some of my dinar to friends and say ENJOY !!! Take it to a bank and deposit it. Who cares, and who will check on where it came from. AM I WRONG ???

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RicknSaudi Newbie

RicknSaudi

Posted
Posted

Thanks Mark. It's refreshing to see someone in your profession giving free advice. As one who is taking in every tidbit and morsal of legal info (both solicited and non-), I am leaning in the direction you point to regarding "standing (mostly) idly by" until this RV happens. I don't feel confident enough in my current state of relative poverty to be wasting the time of tax attorneys, CPA's, wealth advisors, etc., on what to do if this colorful toilet paper I am holding makes me rich and asking them for what would be tantamount to "free" info gathering.

So when you write what you do, and post for all to see, I'm pretty sure that there are multitudes out there that feel this priceless legal information will help fill a void.

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Traconesu02 Newbie

Traconesu02

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Posted

Thanks for the post ExecConsult

I agree with whipper56 - If you hand a friend or family a bunch of dinar just after it RV's and tell them to go deposit it into thier accounts.

They will be the ones responsible for paying the taxes on those dinar.

And as mentioned I do not believe the IRS really cares who pays the taxes just as long as they get thier money.

However this is each individuals call on what to do with thier dinar, and when to do it.

One thing that did bother me on donating my dinar to the church when it RV'd -

I read in an IRS suppliment that I will only be able to deduct the amount of money that I paid for the dinar from my taxes.

I had always thought that I would be able to deduct the fair market value of the dinar at the time of the donation.

Anyone have any thoughts on this ?

GoRV.gif

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hspotman Experienced

hspotman

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Posted (edited)

Just want to throw something out there........... Does anyone really think the bank or who ever you exchange your dinar with really care where you got them from ??? Does your bank ask you where you got the $1,000.00 you just deposited into your acct.??? NO.... Why would anyone have to show proof where they got their dinars from. Who is going to find out you JUST GAVE your friend 500K before he / she went to the bank to exchange them. " I " do not have every receipt for all my dinars. AND, I'm sure the bank OR IRS doesn't care as long as they get the tax $$$ from WHO EVER cashes them in. I, dont see this GIFTING letter and all this leagle stuff as a BIG thing. I for one am going to just give away some of my dinar to friends and say ENJOY !!! Take it to a bank and deposit it. Who cares, and who will check on where it came from. AM I WRONG ???

I am pretty sure that if you don't accompany a letter stating that you gifted the dinar to them, they won't be able to cash it....unless they have a receipt of some sorce. If you read Ali's cash in thread(forget what it is called exacty), he says you will have to fill out a bunch of forms(forget what they are called) and I am sure there will be a line that says,"was this gifted to you". Something of this magnitude cannot go unreported to the IRS, they have all the steps covered I'm sure in their past. The gift"y" will need some sort of receipt, as will we. JMEO

Edited by hspotman
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RicknSaudi Newbie

RicknSaudi

Posted
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Do you know any good tax attorneys near the Bristol, TN / VA area? Thanks.

No disrespect, Vlb, but that seems like a pretty broad question. I can understand a city, but.... / VA? Why don't you just ask him if he knows any good tax attorneys in the lower 48. Just Sayin'

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ExecConsult - Thank you for your very informative limited advise. It will help many on the path of planning and will hopefully save many from giving extra funds to the IRS/UN. Like they need anymore.

Thanks again chap....

GO RV !!!!!!!!

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ExecConsult Newbie

ExecConsult

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Just want to throw something out there........... Does anyone really think the bank or who ever you exchange your dinar with really care where you got them from ??? Does your bank ask you where you got the $1,000.00 you just deposited into your acct.??? NO.... Why would anyone have to show proof where they got their dinars from. Who is going to find out you JUST GAVE your friend 500K before he / she went to the bank to exchange them. " I " do not have every receipt for all my dinars. AND, I'm sure the bank OR IRS doesn't care as long as they get the tax $$$ from WHO EVER cashes them in. I, dont see this GIFTING letter and all this leagle stuff as a BIG thing. I for one am going to just give away some of my dinar to friends and say ENJOY !!! Take it to a bank and deposit it. Who cares, and who will check on where it came from. AM I WRONG ???

I can understand why you think/feel the way you do. There are so many people out there who feel the same way as you. However, you final question was, "am I wrong?" I will tell you why you are.

First I'll deal with the documentation part of your post. You are correct that if you go and place $1,000 in your account no one will ask any questions. However, there are laws in place (and bank policies to support them) that would require you to be able to verify where any cash deposit of $10,000 or more came from. The same type of thing will take place for nonfunctional cash such as the Iraqi Dinar.

Next I'll deal with the tax issue. You are correct again that the IRS doesn't care who pays the tax as long as they get paid. However, you are missing something. Gift tax is separate from the income tax. So, let's say that you have a gain of $1,000,000 and pay 35% of it in income taxes leaving $650,000. Let's say that you give $500,000 of that to your nephew. The IRS will require you to pay about 35% of the 500,000 in gift tax. (Will you have enough to cover that?) This is why planning is important.

Many people are of the attitude that, If they give some dinar to a friend, the IRS will never know. They may be right. However, when the RV occurs, banks will have to institute policy to secure themselves against money laundering etc.... Part of that policy is likely to include some requirement to give when the Dinar was purchased. The IRS could then require an information return from which they could conduct audits. Don't underestimate the deviousness of the IRS. Did you know that about half of all estate returns are audited by the IRS. You want to know why? Easy Money!! Don't think that the IRS won't be looking for ways to go after taxes associated with the Dinar.

You could be right, you could get away with doing stuff and not reporting appropriately. You could also end up with huge penalties and possible jail time. It is serious stuff to anyone who is familiar with it.

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chanele22 Newbie

chanele22

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You could be right, you could get away with doing stuff and not reporting appropriately. You could also end up with huge penalties and possible jail time. It is serious stuff to anyone who is familiar with it.

I personally will sleep better at night knowing I just paid the tax and can get on with my life. The way " I " look at it is that it's more money than I had when I woke up yesterday.

I'm actually very glad you created this post and look forward to reading more of yours. Welcome to the forums smile.gif

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Traconesu02 Newbie

Traconesu02

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Many people are of the attitude that, If they give some dinar to a friend, the IRS will never know. They may be right. However, when the RV occurs, banks will have to institute policy to secure themselves against money laundering etc.... Part of that policy is likely to include some requirement to give when the Dinar was purchased. The IRS could then require an information return from which they could conduct audits. Don't underestimate the deviousness of the IRS. Did you know that about half of all estate returns are audited by the IRS. You want to know why? Easy Money!! Don't think that the IRS won't be looking for ways to go after taxes associated with the Dinar.

So if a friend of mine gave me 100,000 dinar last year for a birthday present.

The value of the dinar plus shipping only cost my friend $160.00 so he did not fill out any papers for the IRS.

I have kept the dinar and now we are waiting for an RV.

Your statement above pretty much states, I will not be able to cashin that dinar, because I do not have any proof where it came from.

Getting a copy of my friends receipt will not do it because he purchased millions of dinar not just the 100,000 that he gave to me.

What would be your suggestion on such a matter as I am sure it has happened many times to others.

Thanks in advance for your reply.

GoRV.gif

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wgb52 Newbie

wgb52

Posted
Posted (edited)

For years now I have been claiming forex fluctuations as capital gains and losses. Why can't I treat Iraqi dinar the same way? I have used IRS form 6781 Gains and Losses from Section 1256.

Hi. My real name is Mark. I am an estate planning attorney. My intention here is to give some pointers on tax, structured gifting, charitable interests, and other estate planning issues you may have to deal with regarding any sudden increase of wealth due to an RV.

INCOME TAX

Taxes on the appreciation of this money will be taxed as ordinary income. It will be listed on your tax return as "interest income." The income is only recognized when you cash out. The income is figured by the amount you receive less the original cost of the Dinar and any fees associated with the original purchase.

Depending on your state's income taxes, you may wish to create an irrevocable trust in a state that does not have income taxes and place the Dinar in that trust. The trust would pay federal income taxes, but you would avoid the state income tax. You will have to weigh your potential savings against the legal fees that would require and decide for yourself if it is worth it.

If you have charitable interests at all, you could also give the Dinar to a charitable trust after the RV, have the trust sell it, and avoid all taxes completely. However, there are things you lose with this tactic as well. These issues should be well thought out with competent counsel.

GIFTING

If you are planning on giving any of your wealth away, these are things you should consider:

Gifting - Tax

Gift tax is paid by the person giving the gift on any gift (or combination of gifts) made in any given year to a single individual (or entity) if the amount of the gift(s) exceeds $13,000. This is the gift tax "exclusion" amount. If your spouse joins you in the gift, you can also add your spouse's exclusion amount for total gifting of $26,000 to any individual in any given year. (This is why you don't have to fill out a gift tax return for every birthday party you ever threw.)

Once you pass the exclusion amount, you start working under the "exemption" amount. Under current law there is a credit for gift taxes that will allow each of us to give up to a lifetime amount of $1,000,000 without any out of pocket expense. Once you have make the gift, you fill out form 709, figure the tax, claim the credit, send it in and you are done. However, there is a potential DOWNSIDE to using your gift tax exemption. For every dollar of gift tax exemption used during life, you lose one dollar of estate tax exemption for when you pass on.

The following are exempted from gift taxes regardless of the amount:

-Gifts for education expenses made directly to the educational institution

-Gifts for medical expenses made directly to the medical institution

-Gifts to charitable and not-for profit entities

Gifting - Timing - Pre RV

Right now the Dinar aren't worth much and you can give them away without exceeding the exclusion amount. However, to claim the exclusion amount the gift must be a "completed gift." That means that you are not just pledging the Dinar, but you have actually given it away so you can't get it back. I know that many of the people we wish to give to probably wouldn't do well with large sums of cash after an RV. (My kids would all own fast cars if they could.) Your gift may be placed in an irrevocable trust with your intended gift receiver(s) as a beneficiary and lots of restrictions on how and for what any distributions should be made. That way, if the RV comes, your grandchildren could end up with school paid for instead of parties paid for. (You may also use well structured limited business interests to pass on wealth but keep control of it.)

Gifting - Timing - Post RV

I personally would NOT gift prior to the RV because I am not that worried about the gift tax and I'd like to know exactly what I am dealing with. There are sooooo many things that can be done to pass on wealth in constructive ways that will still avoid gift taxes. I don't have the time to go into them here (and you wouldn't read it all anyway). There are lots of ways to take care of those you love without gift (or estate) taxes becoming a problem. Some of these include:

-Tying in charitable interests

-Discounting assets

-Carefully structured gifting using Crummy Powers with multiple beneficiaries (who will never receive) to funnel funds to the real beneficiaries

-Captive Insurance (if you have OR START a business)

However, fore each of these tactics legal expenses would be incurred.

Estate Tax

As the law stands right now, if you die after 2010 your estate will have an exemption amount of only $1,000,000 (adjusted for inflation). Any amount above that will be taxed at about 50%. If you have used some of that exemption through gift taxes, your estate tax exemption will be even lower.

If you are married, you should make sure that your Revocable Living Trust has appropriate tax provisions that allow your estate to use both of your exemptions (effectively doubling the amount). This can not be done under current law unless you have trust based planning.

ASSET PROTECTION

Once you have money, you become one of those people we have all heard of who have "deep pockets." There are over 16,000,000 law suits filed in the US in a year. That is more than 1 lawsuit every 2 seconds. You will have a target. There are five general tiers to Asset Protection:

1) Whatever protection state law provides

2) Insurance

3) Business entities (LLC, FLP, etc....)

4) Domestic Asset Protection Trusts

5) Foreign Asset Protection Trusts

I am only scratching the surface here. Unfortunately, many of you will now go on the internet or talk to friends about this tiny bit of information I have given and get a mix of good and bad information. It is my hope that many of you will also seek competent counsel and get only good information that is fine tuned to your personal circumstances. If you need recommendations for good attorneys to work with, I can get them for you.

If it were me personally, I'd wait until after the RV so that I knew what I was dealing with. However, depending on your circumstances, that may not be the correct course of action for you.

I am not going to give you all hours of unpaid legal advice. However, I will do my best to answer simple, general questions for you.

Best of Blessings to you all.

Simplified Version of Disclaimer

None of the foregoing information can be considered legal advice and I have not created an attorney client relationship with you. Pursuant to circular 230 none of the information contained in this post may be used to avoid tax penalties.

Edited by wgb52
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Captjohn Newbie

Captjohn

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Posted

Just want to throw something out there........... Does anyone really think the bank or who ever you exchange your dinar with really care where you got them from ??? Does your bank ask you where you got the $1,000.00 you just deposited into your acct.??? NO.... Why would anyone have to show proof where they got their dinars from. Who is going to find out you JUST GAVE your friend 500K before he / she went to the bank to exchange them. " I " do not have every receipt for all my dinars. AND, I'm sure the bank OR IRS doesn't care as long as they get the tax $$$ from WHO EVER cashes them in. I, dont see this GIFTING letter and all this leagle stuff as a BIG thing. I for one am going to just give away some of my dinar to friends and say ENJOY !!! Take it to a bank and deposit it. Who cares, and who will check on where it came from. AM I WRONG ???

IMO, if you sell a large amount of dinar and have a large amount of $$ coming into your bank account, Homeland Security, for one, will be all over it. They will want to know where it is coming from and how it was generated. Keep all your dinar purchase receipts and.........stay thirsty my friend.

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Montana Newbie

Montana

Posted
Posted

Hi Mark,

Thank you for your insights-most helpful.

How would we employ you to assist us with these matters?? What area are you in (and would it matter)?

Hi. My real name is Mark. I am an estate planning attorney. My intention here is to give some pointers on tax, structured gifting, charitable interests, and other estate planning issues you may have to deal with regarding any sudden increase of wealth due to an RV.

INCOME TAX

Taxes on the appreciation of this money will be taxed as ordinary income. It will be listed on your tax return as "interest income." The income is only recognized when you cash out. The income is figured by the amount you receive less the original cost of the Dinar and any fees associated with the original purchase.

Depending on your state's income taxes, you may wish to create an irrevocable trust in a state that does not have income taxes and place the Dinar in that trust. The trust would pay federal income taxes, but you would avoid the state income tax. You will have to weigh your potential savings against the legal fees that would require and decide for yourself if it is worth it.

If you have charitable interests at all, you could also give the Dinar to a charitable trust after the RV, have the trust sell it, and avoid all taxes completely. However, there are things you lose with this tactic as well. These issues should be well thought out with competent counsel.

GIFTING

If you are planning on giving any of your wealth away, these are things you should consider:

Gifting - Tax

Gift tax is paid by the person giving the gift on any gift (or combination of gifts) made in any given year to a single individual (or entity) if the amount of the gift(s) exceeds $13,000. This is the gift tax "exclusion" amount. If your spouse joins you in the gift, you can also add your spouse's exclusion amount for total gifting of $26,000 to any individual in any given year. (This is why you don't have to fill out a gift tax return for every birthday party you ever threw.)

Once you pass the exclusion amount, you start working under the "exemption" amount. Under current law there is a credit for gift taxes that will allow each of us to give up to a lifetime amount of $1,000,000 without any out of pocket expense. Once you have make the gift, you fill out form 709, figure the tax, claim the credit, send it in and you are done. However, there is a potential DOWNSIDE to using your gift tax exemption. For every dollar of gift tax exemption used during life, you lose one dollar of estate tax exemption for when you pass on.

The following are exempted from gift taxes regardless of the amount:

-Gifts for education expenses made directly to the educational institution

-Gifts for medical expenses made directly to the medical institution

-Gifts to charitable and not-for profit entities

Gifting - Timing - Pre RV

Right now the Dinar aren't worth much and you can give them away without exceeding the exclusion amount. However, to claim the exclusion amount the gift must be a "completed gift." That means that you are not just pledging the Dinar, but you have actually given it away so you can't get it back. I know that many of the people we wish to give to probably wouldn't do well with large sums of cash after an RV. (My kids would all own fast cars if they could.) Your gift may be placed in an irrevocable trust with your intended gift receiver(s) as a beneficiary and lots of restrictions on how and for what any distributions should be made. That way, if the RV comes, your grandchildren could end up with school paid for instead of parties paid for. (You may also use well structured limited business interests to pass on wealth but keep control of it.)

Gifting - Timing - Post RV

I personally would NOT gift prior to the RV because I am not that worried about the gift tax and I'd like to know exactly what I am dealing with. There are sooooo many things that can be done to pass on wealth in constructive ways that will still avoid gift taxes. I don't have the time to go into them here (and you wouldn't read it all anyway). There are lots of ways to take care of those you love without gift (or estate) taxes becoming a problem. Some of these include:

-Tying in charitable interests

-Discounting assets

-Carefully structured gifting using Crummy Powers with multiple beneficiaries (who will never receive) to funnel funds to the real beneficiaries

-Captive Insurance (if you have OR START a business)

However, fore each of these tactics legal expenses would be incurred.

Estate Tax

As the law stands right now, if you die after 2010 your estate will have an exemption amount of only $1,000,000 (adjusted for inflation). Any amount above that will be taxed at about 50%. If you have used some of that exemption through gift taxes, your estate tax exemption will be even lower.

If you are married, you should make sure that your Revocable Living Trust has appropriate tax provisions that allow your estate to use both of your exemptions (effectively doubling the amount). This can not be done under current law unless you have trust based planning.

ASSET PROTECTION

Once you have money, you become one of those people we have all heard of who have "deep pockets." There are over 16,000,000 law suits filed in the US in a year. That is more than 1 lawsuit every 2 seconds. You will have a target. There are five general tiers to Asset Protection:

1) Whatever protection state law provides

2) Insurance

3) Business entities (LLC, FLP, etc....)

4) Domestic Asset Protection Trusts

5) Foreign Asset Protection Trusts

I am only scratching the surface here. Unfortunately, many of you will now go on the internet or talk to friends about this tiny bit of information I have given and get a mix of good and bad information. It is my hope that many of you will also seek competent counsel and get only good information that is fine tuned to your personal circumstances. If you need recommendations for good attorneys to work with, I can get them for you.

If it were me personally, I'd wait until after the RV so that I knew what I was dealing with. However, depending on your circumstances, that may not be the correct course of action for you.

I am not going to give you all hours of unpaid legal advice. However, I will do my best to answer simple, general questions for you.

Best of Blessings to you all.

Simplified Version of Disclaimer

None of the foregoing information can be considered legal advice and I have not created an attorney client relationship with you. Pursuant to circular 230 none of the information contained in this post may be used to avoid tax penalties.

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ExecConsult Newbie

ExecConsult

Posted
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Posted (edited)

I agree with whipper56 - If you hand a friend or family a bunch of dinar ...

...

I had always thought that I would be able to deduct the fair market value of the dinar at the time of the donation.

Anyone have any thoughts on this ?

Traconesu02 -- In regards to your first paragraph, see my response to whipper56 above.

In response to your second paragraph, you are correct, they will only allow you to deduct your "basis" in the asset that you give. You could cash in the dinar, pay taxes on the income, donate the remaining cash and deduct the total amount of cash donated. You would have to run the numbers to see which would work out best for you.

However, there are a couple of other really cool things you can do using charitable trusts. Lets say that you take $1,000,400 worth of Dinar that you paid about $400 for. You can place the Dinar in a Charitable trust. The trust cashes out the Dinar and no one has to pay any income taxes on the appreciation of the Dinar. True you only get to deduct $400, but you save taxes on $1,000,000 in income. We are not done yet. You set up the trust one of two ways:

WAY 1 - CRT - Charitable Remainder Trust - Their are a lot of permutations of CRTs, but the basics are that the trust invests the assets and gives the income to you & or other beneficiaries. The church gets the corpus of the trust later. That means you get income off of $1,000,000 without ever having to pay the taxes on earning the million in the first place. (What happens if the charity is your own foundation and the foundation hires you and your kids to run it?)

WAY 2 - CLAT - Charitable Lead Annuity Trust -- If you are trying to pass this money on to kids etc, you have the income from the assets go to the charity for a stated number of years (i.e. 20) and then the remainder goes to your beneficiaries. If it is done correctly, you avoid all gift taxes for what passes to your beneficiaries.

Edited by ExecConsult
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