Dinar Taxes - Attorney Breaks It Down

[jimmey309]

Mark --

Thanks for the info.

j

[ExecConsult]

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

I hope that you see this notice in your email. I believe we have both been thinking about the charitable deduction incorrectly. I would email you if I could, but I can't. Your profile doesn't allow enough space to address this issue, so all I can think is to place my thoughts on the matter here. I will be interested to hear your thoughts on the matter should you choose to respond.

I have put more thought and some more time into the issue of deductions for charitable contributions. I realized that most of us (if not all of us) have been thinking of the dinar "investment" incorrectly. We have been thinking of it as an appreciated asset when in fact that is not its appropriate classification. Put simply, it is cash. Certainly it is foreign cash, it is nonfunctional cash, but it is still cash. As I attempt to look at the entire picture surrounding the issue, I am more confident than ever that this is the appropriate classification. That changes the thought processes in regards to charitable contributions.

As I looked for authority to support or refute my thoughts about this characterization, I found lots of anecdotal evidence that I was correct, but no actual authority (like a definition of cash in the IRC). I found that an Academy and Idaho State University both welcome "cash contributions of any kind - foreign or domestic." [paraphrased] They simply give a receipt for a cash contribution denominated in USD based on the exchange rates on the date of the gift. I contacted an attorney specializing in work with expatriates who stated that my thoughts on the matter were correct and showed me the website for Duke University which says the same thing. However, he had no authority to point to either. The closest thing to authority that I have come up with is the instructions to form 8300 which states a definition of cash in part as:

"Cash is money. It is currency and coins of the United States and any other country."

If our clients are in deed making gifts of cash, the only deduction limitation is 50% of their income unless limited by gifting to a non-operating private foundation or other non-public charitable entity. Finding a definition of cash or other authority to support this presumption could make all the difference in the world.

I hope that this will be helpful in the future to your clients and mine. If we find the authority. I'd like to post it here and elsewhere to help as many as possible.

Best of Blessings,

Mark

[Metrious]

Mark,

I have read your information and also have concluded that I will be paying straight income tax which would mean 35%... My question is that I have heard of people starting LLC's and gifting the dinar pre-RV to the corporation.

How is tax handled in this case? Lets say I was to form SMITH LLC and gave it 10 Million IQD and it went to 1:1 with the USD. How much do corps pay? Or is it true about pass through taxation where I am going taxed on what is income, which would be limited to $150K being at 28% on the income tax scale.

I know you are just an estate attorney but I hope you can help. Thanks. My state is Washington so I am aware of some B&O taxes but have no clue what B&O is or how much it is percentage wise.

Thanks for the brilliant information.

Martin

[USMC_2674]

Mark,

I have read your information and also have concluded that I will be paying straight income tax which would mean 35%... My question is that I have heard of people starting LLC's and gifting the dinar pre-RV to the corporation.

How is tax handled in this case? Lets say I was to form SMITH LLC and gave it 10 Million IQD and it went to 1:1 with the USD. How much do corps pay? Or is it true about pass through taxation where I am going taxed on what is income, which would be limited to $150K being at 28% on the income tax scale.

I know you are just an estate attorney but I hope you can help. Thanks. My state is Washington so I am aware of some B&O taxes but have no clue what B&O is or how much it is percentage wise.

Thanks for the brilliant information.

Martin

The LLC would have it as normal income too... but, the LLC has a lot more legitimate expense possibilities to offset the income.

If the LLC makes $10,000,000 and you can spend $6,000,000 on "stuff" for the business... you only pay taxes on $4,000,000. Hard to do that as an individual.

If the business "stuff" ends up getting used a bit for personal reasons too, so much the better as far as you are concerned.

Obviously you need to be careful with this, as the IRS does take it poorly when you use businesses to pay for your lifestyle without legitimate business transactions.

Semper Fidelis

[Rayzur]

Hi Mark..... I have been reading your information and appreciate what you have contributed. Are you taking IQD clients, and if so, how would my friend contact you.

My tax prep is farily extensive as it is.... and I am not not tax savy.... at all.... period.... God love my accountant for making sense of the mouse maze I send him.... I can't help my friend who wants to know the following:

My question which could well come from the land of stupid.... is: does one have to set up a trust (of whatever kind is demed appropriate) or set up the whatevers, BEFORE cashing in IQD.... or does that have to happen before the end of the tax year.... Probably not a simple question.... Having just read taht we may have only 90 days to exchange for the lower denominations may change the game plan for some, and I am asking for a friend who wants to figure out what is best to do in asset protection...

Thanks for all you have contributed

[ExecConsult]

The LLC would have it as normal income too... but, the LLC has a lot more legitimate expense possibilities to offset the income.

If the LLC makes $10,000,000 and you can spend $6,000,000 on "stuff" for the business... you only pay taxes on $4,000,000. Hard to do that as an individual.

If the business "stuff" ends up getting used a bit for personal reasons too, so much the better as far as you are concerned.

Obviously you need to be careful with this, as the IRS does take it poorly when you use businesses to pay for your lifestyle without legitimate business transactions.

Semper Fidelis

USMC_2674 - You bring up a good point about personal use. If you are trying to take advantage of the tax law changes for 2011 that allow 100% depreciation of capital investment property completely placed in use this year, it must be 100% business use property. You can't have a business car that is available for personal use (like I do now). You must have only a business car. However, creative you become with your business purposes, the assets must not be available for "personal" use. (Don't buy a computer and load it up with games. Don't buy a TV that sits in your living room, but you can get one for your home office (for clients or to keep up on industry news).

Best of Blessings,

Mark

Hi Mark..... I have been reading your information and appreciate what you have contributed. Are you taking IQD clients, and if so, how would my friend contact you.

My tax prep is farily extensive as it is.... and I am not not tax savy.... at all.... period.... God love my accountant for making sense of the mouse maze I send him.... I can't help my friend who wants to know the following:

My question which could well come from the land of stupid.... is: does one have to set up a trust (of whatever kind is demed appropriate) or set up the whatevers, BEFORE cashing in IQD.... or does that have to happen before the end of the tax year.... Probably not a simple question.... Having just read taht we may have only 90 days to exchange for the lower denominations may change the game plan for some, and I am asking for a friend who wants to figure out what is best to do in asset protection...

Thanks for all you have contributed

I am not supposed to self promote. It could be considered spam. I've heard that some people have googled me and found the website for my firm, Advanced Legal Planning. You might also find me on facebook (though I rarely ever go there).

Your question is one I see quite often. Some trusts need to be set up prior to exchanging IQD for USD. Some do not. It really depends on their type and purpose. My suggestion is cash a little to hire counsel to set up what you need. If you need to, pay a little more for expedited service. 90 days should be more than enough to set up what you want/need. In fact my thought is 30 days to design a plan, 30 days to set up structures and fund the ones that will have dinar, 30 days to make any remaining necessary exchanges of IQD for USD. Should be a snap.

There are a lot of options for your friend's asset protection. He or she really needs to sit down one on one with counsel to reach appropriate decisions.

Best of Blessings,

Mark A. Galloway, Esq.

[Rayzur]

Got it ! Thanks Mark.... Hope to see you soon in a mailbox near you

[Helicopter Barry]

Got it ! Thanks Mark.... Hope to see you soon in a mailbox near you

[Rayzur]

Hey Mark..... something is going on with the site, and it looks like you sent me a message... and the site keeps showing error.... So I am trying to get back to you and can't.... Just wanted you to know that I am not ignoring, just can't get to you..... Will keep trying