Dinar Taxes - Attorney Breaks It Down

[RNLA]

So, you anticipate 50 percent or more total tax (or just federal), if it falls into Sectn. 988 category?

[RNLA]

So, you anticipate 50 percent or more total tax (or just federal), if it falls into Sectn. 988 category?

[ExecConsult]

So, you anticipate 50 percent or more total tax (or just federal), if it falls into Sectn. 988 category?

If you just cash out the day after the RV, I would anticipate 35% federal, 0-10 state [depends on where you live], and maybe some local as well would all be income tax. However, my advice is to just cash a tiny bit. Just something to pay a bill you've been dying to pay, or to throw a "little" party. Then see a good estate planning attorney, a good CPA, and a good financial adviser. Get them talking with you and each other. Figure out what to do to delay and reduce taxes.

If you have some money, then you might start talking with them now. Some things that can be done pre-RV are much superior to those that can be done post-RV, but many require quite a bit of up front work and that will cost some money.

Here's a list of fun things pre-RV that will cost, but if you can afford them it would be well worth it.

Set up a self directed Roth IRA and have the IRA purchase more Dinar. All the growth in the Roth IRA is tax free.

Set up an offshore corporation or trust. Contribute assets to it. Use those assets as "in-kind" payment for a life insurance policy. If the Dinar are inside a life insurance policy, all of the growth of the Dinar is completely tax free. How do you get it out? Borrow against the policy and don't pay it back.

Just a couple of fun ideas - they sound simple but they are not. There are laws and regulations swirling all around the suggestions I just made. They have to be done "just right" to make sure you stay compliant. It costs some money, but if you can get tax free growth in the Dinar it will be worth it.

I hope some of that helps.

Best of Blessings,

Mark

[D & B]

Good evening all,

Thanks Mark, Had my first meeting with my investment firm and tax CPA. My CPA, like your posting, admitted that foreign currency projects wasn't his usual area but he would start the research. This CPA is one of those

that is incredibly intelligent with the tax code and estate planning. He and his staff has saved us quite a bit of money because of his expertise. Anyway, his first thought was to check the short/long term gain dates for the purchase and the second was that no tax would be owed until a taxable event occurred. He reminded us that these thoughts were just initial ones. Once he and his staff was more familiar with this area of the tax code, he'd be able to come up with more concrete planning.

The initial thought from the investment side is to offset the tax event by investing the proceeds into another investment that has a large write-off component, such as a natural gas or oil well limited partnership.

As I mentioned this was our first meeting, these guys are really good and once up to speed sure to get more options. Mark, thanks again for all the info and help

Semper Fi

Dennis

[ExecConsult]

Good evening all,

The initial thought from the investment side is to offset the tax event by investing the proceeds into another investment that has a large write-off component, such as a natural gas or oil well limited partnership.

Semper Fi

Dennis

Thanks for the post Dennis. I love the natural gas/oil well idea. In fact I was thinking of creating a topic on that and you reminded me. This will be fun. I have tons of oil and gas stuff going on in my back yard (so to speak).

I'm really glad you have a good CPA.

Best of Blessings,

Mark

Edited November 9, 2010 by ExecConsult

[DLP]

Hi Mark, I thought your post was insitefule. Can you speak to the whole concept of converting Dinar directly to Gold, Precious metals, or foreign currency (Thru Ali) and holding it there for one year for the expressed purpose of achieving long term capital gains. It would save 22% in taxes. Your thoughts. Dennis

Hi, My name is Mark. I'm an estate planning attorney who is fairly new to the forums. I've been reading lots of topics and posts on Capital Gains and correcting people where I can. Instead of repeating myself over and over again on other people's topics, I decided to spell it all out here. Hopefully this will help some people.

First I want to say that if anyone has been confused by the jumble of information out there it is understandable. I even read one post where an individual contacted the IRS and was given the wrong answer by the IRS employee. Having the written statement from the IRS would probably be enough to avoid being accused of fraud on your taxes, but it would not allow you to escape the tax, penalties, and interest. It is much better to know what you are dealing with and that way you can plan for it. (You can also plan on how to mitigate or avoid it. ) I don't want you to get the wrong idea and think that all attorneys or CPAs should know this stuff right off the tops of their heads. I sure didn't. I had to go digging. This is what I found:

Section 988 OR Section 1256?

The Internal Revenue Code (IRC) deals with foreign currency exchange profits and losses under two different Sections; 988 and 1256. The primary section, 988, deals with gains and losses as ordinary income (with one small exception). However, foreign currency investors are often able to opt out of Section 988 and have their investments treated as Capital Gains under Section 1256. Unfortunately, Section 1256 only applies to contracts (i.e. futures contracts and forward contracts) for regularly traded foreign currency. Even if Dinar were a regularly traded currency, I have not seen anyone on DinarVets saying, "I just purchased a spot contract on Dinar this morning. Go RV!!" What I see instead is that people have purchased Dinar either in an account or the physical currency and will hold that currency as long as they want to hold it. Therefore, even if Dinar were a regularly traded currency (which it is not), Section 1256 still does not apply. Therefore you are stuck under Section 988.

The Confusion of Section 988

Many people have looked at IRS Publication 525, Pg. 33 to justify their assertions that your Dinar RV income should be treated as Capital Gains. It states:

Foreign currency transactions. If you have

a gain on a personal foreign currency transac-

tion because of changes in exchange rates,

you do not have to include that gain in your

income unless it is more than $200. If the gain

is more than $200, report it as capital gain.

This sounds pretty cut and dried. However, you should never underestimate the confusion of the IRS or its code, the IRC. The above quote refers to a "personal . . . transaction." You might be surprised to know that what you have done is not a "personal transaction" under the language of Section 988. IRS Pub. 525 did not anticipated a situation where masses of individuals would be investing in foreign currency with hopes of obscene profits. This language is intended for the traveler who went to New Zealand on "holiday" and when they returned and exchanged back to dollars, they had a little bit of gain or loss. That is not your situation.

Breaking it Down

I figure the best way to make everything clear is to show you the part of Section 988 dealing with "Personal Transactions." and then explain it.

Section 988 (e)

Application to individuals

(1) In general

The preceding provisions of this section shall not apply to any section

988 transaction entered into by an individual which is a personal

transaction. [So far it looks pretty good. This means

it will not be ordinary income. It will be treated like any

other asset and be Capital Gains.]

(2) Exclusion for certain personal transactions

If--

(A ) The preceding provisions of this section shall not apply to any

transaction, and

(B ) such transaction is a personal transaction,

no gain shall be recognized for purposes of this subtitle by reason of

changes in exchange rates after such currency was acquired by such

individual and before such disposition. The preceding sentence shall not

apply if the gain which would otherwise be recognized on the transaction

exceeds $200. [This means that if the gain is lower than $200 you don't even claim it.

However, if you exceed $200 then you are back to my previous statement.

Still looks pretty good. This is where the information for IRS Pub 525 comes from.

Unfortunately this is where most people stop.]

(3) Personal transactions

For purposes of this subsection, the term "personal transaction" means [finally a definition]

any transaction entered into by an individual, except that such term shall

not include any transaction to the extent that expenses properly

allocable to such transaction meet the requirements of--

(A ) section 162 (other than traveling expenses described in

subsection (a)(2) thereof), or

(B ) section 212 (other than that part of section 212 dealing with

expenses incurred in connection with taxes). [and we still don't know what it "shall not include"]

You can see how this can get confusing. To really look at it, we should probably go to Section 162 and Section 212, but I'm going to skip 162 and tell you what 212 says:

Section 212. Expenses for production of income

In the case of an individual, there shall be allowed as a deduction all the ordinary

and necessary expenses paid or incurred during the taxable year--

(1) for the production of income

(2) for the management, conservation, or maintenance or property held for

the production of income; or

(3) in connection with the determination, collection, or refund of any tax.

Each Dinar purchase had expenses associated with it such as transaction fees, transportation fees, etc.... That is how the dealers stay in business. Since there WERE expenses related to the purchase of Dinar that "meet the requirements" of Section 212(1) and/or Section 212(2), the income associated with those transactions are specifically EXCLUDED from the definition of "personal transaction" under Section 988. Section 988 (e) "Application to individuals" - does not apply. Since (e) basically says that the provisions of Section 988 don't apply and now you can't use (e), you are back in a situation where the provisions of Section 988 DO apply. That means that you have ORDINARY INCOME. It even goes as far as to say that it should be looked at as "interest income."

As I said before, I am an "Estate Planning" attorney. I am not a tax attorney. I am tax trained with my undergrad being in accounting, receiving a certificate in tax from my law school, and working in a field where I am constantly looking at ways to help people save taxes. However, I am not above understanding that I can be wrong sometimes. If any of you have a brilliant tax attorney who has a way out of what I have just described, I'm sure we would all LOVE to hear about it. Until then, be safe with the IRS - it is ordinary income under Section 988.

Best of Blessings,

Mark

[ExecConsult]

Hi Mark, I thought your post was insitefule. Can you speak to the whole concept of converting Dinar directly to Gold, Precious metals, or foreign currency (Thru Ali) and holding it there for one year for the expressed purpose of achieving long term capital gains. It would save 22% in taxes. Your thoughts. Dennis

Dennis,

I'd love to be able to speak to it. However, I have not been able to get a definitive answer. I did create a topic on it. I don't think it can be done. However, I'm still searching. If I find anything it will be posted on the topic labeled, "Exchanging Dinar for Gold-Does it Work?" That topic can be read here:

Best of blessings,

Mark

P.S. My wife has a friend working her way up through the IRS looking into it for me. I am hoping to get an answer soon.

[ExecConsult]

bump - hopefully back to page 1

[leola]

MARK ,,,THANK YOU,,,,,,I WOULD LIKE TO POSE A QUESTION, IF WE WERE TO PAY TAXES ON THE DINAR GAIN THAT SOME OF US HAVE ALREADY GAINED,,,SMALL AS IT IS,,,WOULD THIS NOT CHANGE THE FUTURE TAXES TO A CAPITOL GAINS ????????? FOR INSTANCE,, THE DINAR HAS GAINED IN VALUE SINCE I PURCHASED IT,,MAYBE A COUPLE OF HUNDRED DOLLARS,,OF WHICH THERE WERE COSTS INVOLVED (COMMISSION )...

2010 TAXES THAT IS....

[ExecConsult]

MARK ,,,THANK YOU,,,,,,I WOULD LIKE TO POSE A QUESTION, IF WE WERE TO PAY TAXES ON THE DINAR GAIN THAT SOME OF US HAVE ALREADY GAINED,,,SMALL AS IT IS,,,WOULD THIS NOT CHANGE THE FUTURE TAXES TO A CAPITOL GAINS ????????? FOR INSTANCE,, THE DINAR HAS GAINED IN VALUE SINCE I PURCHASED IT,,MAYBE A COUPLE OF HUNDRED DOLLARS,,OF WHICH THERE WERE COSTS INVOLVED (COMMISSION )...

2010 TAXES THAT IS....

Unfortunately this will not work. In some ways this works like stocks. They go up and they go down but you never show income or loss on the stock until you sell it. Similarly, you do not realize income or loss on physical foreign currency until you dispose of it (either exchange or spending it). If you exchange it you have either gain or loss under section 988.

Further, even if there were something in the tax code that would allow you to claim your gain for 2010 and adjust your basis, it would not change the nature of the asset. The same occurs if contributing to a corporation. The corporation takes the asset with the same nature as the contributor.

I love it when people think. Sometimes it works out and sometimes it doesn't.

Best of Blessings,

Mark

[Niko]

Set up an offshore corporation or trust. Contribute assets to it. Use those assets as "in-kind" payment for a life insurance policy. If the Dinar are inside a life insurance policy, all of the growth of the Dinar is completely tax free. How do you get it out? Borrow against the policy and don't pay it back.

Read more: http://dinarvets.com/forums/index.php?/topic/38152-dinar-taxes-attorney-breaks-it-down/page__st__40#ixzz1BOz9U0sz

That walks the fine line of money laundering. You may want to read up on limra.

Thanks for the rest of the post, wish it were going to be taxed as capital gains but better to know now.

Thanks again!

[jimmey309]

Mark --

Thank you for all your posts.

Of course we all wish for

Capital Gains qualifications here

but seemingly not applicable

from what you have said.

However, I must take exception

with one thing you stated.

Euros are used to purchase things everyday

in the United States.

I can not speak for Kansas but

remember it is a small percentage

of the people in the country.

Who says IQD can not be utilized

to purchase goods and services

and commodities in the US ?

I believe they can and are.

And while we may not use them in this manner

everyday,

it is possible and conceivable.

The problem is that while I am right,

as long as the banks do not regularly

allow us to exchange IQD in a normal

fashion, the IRS will find a way to steal

our money.

The banks do allow normal daily exchanges

of Euros and so the IRS can not rob the Euro

investor in this manner.

Clearly, the IQD is a functional currency

no matter what the IRS subjects us to.

Unfortunately, they decide our punishment

and like all good Americans we must accept it.

Or not.

I sure hope the RV causes me to have this dilemna.

Regards, j

[TXPoleman]

Nice post, Mark, well researched and on the "money"...I've contacted 2 CPAs and 1 tax attorney, and got the same answer - gains from an RV will be considered ordinary income, good luck fighting the IRS if you want to.

I was interested in off-shoring the gain, but that will not help unless I want to find a country without extradition agreements with the US, be willing to live there for the rest of my life, not come back to the US and probably not see my closest relatives for a long time...so, in a nutshell, be prepared to pony up the nasty taxes, but be happy with the rest of the money, it could be a significant, life-changing amount...

[firemans35]

Can someone please send me the link to the simple form for gifting to a corporation. I had it now I can not find it. Thanks!

[anniebanannie]

What about giving to a church? Give pre-RV? and does it make a difference if the church is incorporated or not?

[usndiver]

What about giving to a church? Give pre-RV? and does it make a difference if the church is incorporated or not?

I pre-gifted to several charities. Pre-gifting allows you to keep more taxes away from the IRS, i.e.

Lets say you have 1M IQD and you want to give 10% (100 IQD) to a church.

Assume an enchange rate of 1 to 1

Pre RV gift allows the following: Church has $100K, and you end up with $585K ($900K - $315K (35% federal tax)).

Post RV gift leaves the following: $1M - $350K (35% federal tax) = $650K. $650K-$100K (church donation) = $550K left for you.

The pre RV option keeps $35K out of the IRS coffers and in your pocket. The above scenario does not factor in the spread or state income tax.

As far as a church being incorporated. I would assume that they would be required to be a non-profit entity in order for the churches congregants to be able to itemize their donations on their federal taxes.

[Soldiering4U]

Can we please get this Pinned that way it won't be lost it has great information for all people newbies and people who have been holding for a while Mods Pin this please!!!!

[ExecConsult]

Mark --

Thank you for all your posts.

Of course we all wish for

Capital Gains qualifications here

but seemingly not applicable

from what you have said.

However, I must take exception

with one thing you stated.

Euros are used to purchase things everyday

in the United States.

I can not speak for Kansas but

remember it is a small percentage

of the people in the country.

Who says IQD can not be utilized

to purchase goods and services

and commodities in the US ?

I believe they can and are.

And while we may not use them in this manner

everyday,

it is possible and conceivable.

The problem is that while I am right,

as long as the banks do not regularly

allow us to exchange IQD in a normal

fashion, the IRS will find a way to steal

our money.

The banks do allow normal daily exchanges

of Euros and so the IRS can not rob the Euro

investor in this manner.

Clearly, the IQD is a functional currency

no matter what the IRS subjects us to.

Unfortunately, they decide our punishment

and like all good Americans we must accept it.

Or not.

I sure hope the RV causes me to have this dilemna.

Regards, j

Jimmey,

I know it has been a while since you posted this. It has been sitting open on my computer screen for days now waiting for a response. I don't think that we are at all in disagreement on the issues. However, I think that it may appear to others that we have a misunderstanding. I believe you understand the following things. Please forgive me for posting this so that others do not get confused.

I had no idea that the Euro was used so commonly. However, it does not change my general message.

When I speak of a nonfunctional currency. I am not speaking in practical terms as you are. I am using a more technical definition. Put simply, for a US citizen, official US currency is our "functional currency" by definition. Anything that is not US currency is Nonfunctional currency. Consider the following definition:

http://www.answers.com/topic/functional-currency#ixzz1Bi2YNW6e

More importantly, in the regulations that stand behind section 988, the examples constantly define our functional currency as US currency.

http://edocket.access.gpo.gov/cfr_2009/aprqtr/pdf/26cfr1.988-1.pdf

Although it may be a "usable" currency, the IQD will always be a "nonfucntional" currency for US citizens in my posts because it is nonfunctional currency by IRS definition.

Regardless of how readily a transaction utilizing foreign currency is done, it is still a barter transaction. There are many types of barter transactions which are common and frequently used. There are even businesses that are set up to facilitate bartering. They are called "Barter Exchanges."

The two major differences between using the Euro in day to day transactions and using the Dinar to purchase items are as follows:

First - The Dinar is being held (and was purchased) as an investment. The Euro being used for day to day transactions was not (I presume). Therefore, the Euro will fall into the exception for a Personal Transaction where the Dinar does not. Under this exception any gains under $200 are not reported and any losses are not reportable.

Second- Any gain on the use of the Euro to purchase goods will be minuscule based on slight shifts in exchange rates. It is still disposition of a nonfunctional currency under Section 988 (e) and still a barter, but not reportable unless it exceeds $200 in gains.

Using IQD to try to accomplish the same thing could get you busted hard. Not only are you most likely not within the "Personal Transaction" exception definition of 988, but even if you were, you would far exceed the $200 income reporting limit.

Hope that helps.

Best of Blessings,

Mark

Can someone please send me the link to the simple form for gifting to a corporation. I had it now I can not find it. Thanks!

Sorry - can't say what form you were looking for, but you don't "gift" to a corporation. You contribute assets in exchange for stock. The transaction will be recorded in the corporate records and you should receive a receipt for your contribution as well as documentation of your stock ownership.

Perhaps this answer is not what you were looking for, but I hope it is helpful.

Best of Blessings,

Mark

[xxxgator]

Hey all ,ive an interesting read on this subject .

An article fromhttp:// www.maximadvisors.com/knowledge-library/international-tax-planning/US-taxation

Sorrry idon't know how to post links!

This site is a company that advises international company's from outside the united states as wellas in the USA how to pay their taxes .This article speaks directly to this conversation and says differently than Mark has stated .Not bashing i just want mark to look at this explanation or others and see what your oppinion on this point of veiw is !

The article is called: US taxation of foreign currancy gains or losses.

I really want to see what you think it's a short 2 page read . Peace

Ps : execu consult or any one else go ahead and chime in

[earjockey]

Hey all ,ive an interesting read on this subject .

An article fromhttp:// www.maximadvisors.com/knowledge-library/international-tax-planning/US-taxation

Sorrry idon't know how to post links!

This site is a company that advises international company's from outside the united states as wellas in the USA how to pay their taxes .This article speaks directly to this conversation and says differently than Mark has stated .Not bashing i just want mark to look at this explanation or others and see what your oppinion on this point of veiw is !

The article is called: US taxation of foreign currancy gains or losses.

I really want to see what you think it's a short 2 page read . Peace

Ps : execu consult or any one else go ahead and chime in

Gator I believe all you basically posted the link correctly, you just need to make sure you tab a space immediately before the http: and close a space before the www. Try editing it if you can. If not I have posted it again below.

http://www.maximadvisors.com/knowledge-library/international-tax-planning/US-taxation

[ExecConsult]

I pre-gifted to several charities. Pre-gifting allows you to keep more taxes away from the IRS, i.e.

Lets say you have 1M IQD and you want to give 10% (100 IQD) to a church.

Assume an enchange rate of 1 to 1

Pre RV gift allows the following: Church has $100K, and you end up with $585K ($900K - $315K (35% federal tax)).

Post RV gift leaves the following: $1M - $350K (35% federal tax) = $650K. $650K-$100K (church donation) = $550K left for you.

The pre RV option keeps $35K out of the IRS coffers and in your pocket. The above scenario does not factor in the spread or state income tax.

As far as a church being incorporated. I would assume that they would be required to be a non-profit entity in order for the churches congregants to be able to itemize their donations on their federal taxes.

Good thoughts usndiver - will work the same post rv if it is pre-cash in. You don't have gain realized until it is turned into cash. Two reasons why this might be a good idea.

1) You will be able to identify the value of the gift

2) Gifting the appreciated asset gives you a better opportunity to get a charitable contribution deduction

Consider the following applied to your example above

Post RV you have 1M IQD worth $1,000,000 and give 100K IQD to the church. You end up wtih $620 ($900K - $280K (900-100 deduction *.35))

Granted this is an oversimplified example assuming that the IQD will qualify as "Capital Gain Property" under the Internal Revenue Code.

Anyway - while you really need to make charitable gifts of the physical dinar instead of cash, you may want to wait until the RV has happened for the above reasons.

Best of Blessings,

Mark

Hey all ,ive an interesting read on this subject .

An article fromhttp:// www.maximadvisors.com/knowledge-library/international-tax-planning/US-taxation

Sorrry idon't know how to post links!

This site is a company that advises international company's from outside the united states as wellas in the USA how to pay their taxes .This article speaks directly to this conversation and says differently than Mark has stated .Not bashing i just want mark to look at this explanation or others and see what your oppinion on this point of veiw is !

The article is called: US taxation of foreign currancy gains or losses.

I really want to see what you think it's a short 2 page read . Peace

Ps : execu consult or any one else go ahead and chime in

The above article and my answer to it can be found here:

My answer begins as post #4

Best of Blessings,

Mark

[xxxgator]

Hey mark thanks for the reply. The main question in this article is not his explanation of information as much as the stating the taxpayers relif act of 1997 has a provision or [ammendment /act section1104 (a) ] that was created to clarify the matter and then goes on to make a" matter of fact " bunch of statements as if he has dealt with this before and is answering all the recent questions sent to him in a very matter of fact way .While stating the " following is a non-technical interpretation of the rules in each of these situations " in the second paragraph of tax treatment from various situations.

In your opinion is this guy,s statements being stated as past expeirence, fact ,or an educated writer's oppinion on the subject.

The way i read this is him stating this as fact ,in the first 4 paragraphs of the article, and then stating heres the law explanation or interpratation of the above 4 paragraphs in common or non lawer speach.

I' ve read your article's and can see how either veiw point could be correct..

Since i'm not a tax attourney ,or cpa ,or an accountant i have no clue .

I'm going to do more research on maxim global wealth advisors and see how many tax attourney's are employed by the company .What kind of reputation the firm has. If the firm is just cpa's and acountant's ect. ect. , if possible to access on the info on the web.If international tax and investment law is their buisness ,then other firms in the same buisness may or may not have the same take on this.I would definatly like to see the oppinions from firms like that because that's how they get paid,by advising other's on international tax leagal issues.

Any other thought's on the subject are appreciated! Ive learned alot from the different people educated in this area as from you!

Thanks

[Iraqi Queen]

Hi Mark,

I wanted to be sure our 501 © 3 organizations are able to cash in our donated dinars without paying taxes.

Am I correct in assuming if I donate my dinars to these organizations after the RV, I will not be required to pay taxes on the IQD and neither will the organizations that I plan on making the donation to, as long as I donate the physical dinar before cashing them in? I was planning on waiting after it RV's then giving them to my designated organizations.

Please advise.

Thank you so much.

[Ingat]

Good thoughts usndiver - will work the same post rv if it is pre-cash in. You don't have gain realized until it is turned into cash. Two reasons why this might be a good idea.

1) You will be able to identify the value of the gift

2) Gifting the appreciated asset gives you a better opportunity to get a charitable contribution deduction

Consider the following applied to your example above

Post RV you have 1M IQD worth $1,000,000 and give 100K IQD to the church. You end up wtih $620 ($900K - $280K (900-100 deduction *.35))

Granted this is an oversimplified example assuming that the IQD will qualify as "Capital Gain Property" under the Internal Revenue Code.

Anyway - while you really need to make charitable gifts of the physical dinar instead of cash, you may want to wait until the RV has happened for the above reasons.

Best of Blessings,

Mark

The above article and my answer to it can be found here:

My answer begins as post #4

Best of Blessings,

Mark

Mark,

I am an estate planning attorney in a boutique firm. My partners and I agree with your analysis of Sec. 988, and we have advised our IQD clients that the gain will be treated as ordinary income.

My question is why you think that the gift of post-RV IQD to a charity will be treated as a contribution of Capital Gain Property that entitles the taxpayer to a deduction equal to the fair market value of the gift. If the gain on the IQD is treated as ordinary income, the deduction should be limited to cost basis. I hope you're right and we're wrong.

Lee

[ExecConsult]

Hey mark thanks for the reply. The main question in this article is not his explanation of information as much as the stating the taxpayers relif act of 1997 has a provision or [ammendment /act section1104 (a) ] that was created to clarify the matter and then goes on to make a" matter of fact " bunch of statements as if he has dealt with this before and is answering all the recent questions sent to him in a very matter of fact way .While stating the " following is a non-technical interpretation of the rules in each of these situations " in the second paragraph of tax treatment from various situations.

In your opinion is this guy,s statements being stated as past expeirence, fact ,or an educated writer's oppinion on the subject.

The way i read this is him stating this as fact ,in the first 4 paragraphs of the article, and then stating heres the law explanation or interpratation of the above 4 paragraphs in common or non lawer speach.

I' ve read your article's and can see how either veiw point could be correct..

Since i'm not a tax attourney ,or cpa ,or an accountant i have no clue .

I'm going to do more research on maxim global wealth advisors and see how many tax attourney's are employed by the company .What kind of reputation the firm has. If the firm is just cpa's and acountant's ect. ect. , if possible to access on the info on the web.If international tax and investment law is their buisness ,then other firms in the same buisness may or may not have the same take on this.I would definatly like to see the oppinions from firms like that because that's how they get paid,by advising other's on international tax leagal issues.

Any other thought's on the subject are appreciated! Ive learned alot from the different people educated in this area as from you!

Thanks

Section 1104(a) of the Taxpayers Relief Act of 1997 simply amended section 988 to make it what it is today. It doesn't give any further insights at least as far as I can tell.

I believe Mr. Jacobs is stating these things as fact. However, I just think he is wrong in regards to this investment. I'd still like to know how he came to that conclusion because I still want to make a well reasoned request for a PLR stating that I can get capital gains treatment. However, I have yet to find anyone who can give me enough of a well reasoned response.

Below, I am going to repost something shared with me that is a counterpoint to what I have to say. It is the beginnings of me having enough reasonable argument to seek a PLR.

Best of Blessings in your research,

Mark

This was posted as a response to something I said elsewhere. Though I do not necessarily agree with what the gentleman says, he seems very well versed in taxes and his arguments may give me the start I need to do a well reasoned request for a PLR on the matter. His response not only refers to Internal Revenue Code Section 988, but also refers to the regulations the the IRS folks refer to when trying to interpret the law. I thought that to make an informed decision you all should have the following thoughts:

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The explication of 988 is generally correct and we are wise to be conservative in staking out any "supportable position" with an item of income, but reading the regultions and the treaties out there, when TEFRA put in the 980s, it was staking out a personal exemption for individuals who actually acquired the currency. The bulk of the 988 transactions are contracts, straddles, and investment positions that involve one or more fixed dates and perhaps the incurring of obligations, or, more pointedly toward 162 and 212, incurring expenses in connection a business or enterprise. Lumping in the fees we pay as 212 expenses for purposes of excluding this transaction from the 988 Personal Transaction exception, is premature.

Put differently, under this analysis, you'd have to conversely conclude that if you purchased your Dinar without fees, then you could say it is subject to the personal exemption, and that flies in the face of the substance of the personal exemption and the substance of the transaction. Indeed this is more than the second example given in 988 regs of vacationer cashing in his pounds sterling, but it isn't one of the expressly described transactions, either. Not even close. Absent direct authority on this fact issue, just calling it a deduction under 212 and saying therefore its not subject to the personal exemption is not directly supported. Note that the deduction for your fees isn't deductible until you actually cash out, versus the 212 analysis of it being deducitble in the year it was incurred, because it presumes an active trade or business or other such pursuit. Put differently, the fees discussed as being determinative aren't deductible in the year they are incurred unless you cash out in the same you you incurred them. The broader intent appears, to me, to be that if there is a business purpose and it is deductible as a business expense, then yes its not a personal transaction and you're into 988 treatment. Example one of the regulations makes the business purpose distinction. If we were to find direct authority, or perhaps request a PLR on the direct issue of personal investment purpose not being a personal transaction, then the conclusion is supportable. The Congressional intent set forth in the TEFRA on this issue might help. Also I haven't scoured the PLRs for responsive content yet. Just dont want to make the jump that the fees we pay for the dinar characterize the nature of the currency obtained.

As for asking the IRS, while there are some agents who will give you a straight answer, I believe it is possible to stake out a contrary position and have it be "supportable" on the continuum of position taking, at least enough to warrant a PLR request.

My follow on analysis is that ok, let's say that you do conclude it is a personal transaction, and that it is greater than $200, then what's the specific authority for calling it a capital asset. There are conflicting authorities for whether or not currency is a capital asset or property for purposes of applying those sections. Also, many of us are in this short term anyway (notwithstanding prior year or other year STCL carry forwards). I just wanted to type my .02 on the issue, because its an interesting and nuanced issue.

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Again, while I don't necessarily agree with him, I'd like the IRS to. Hope this is helpful.

Best of Blessings,

Mark