IRS Double Tax Collecting

[vibo]

I have been thinking about this for a day or so. For the people who are not doing any fancy things with their Dinar, such as the Offshore Corp., ...If I were to cash in and then give a family member a chunk of it, I see two tax liabilities already. How about giving that family member enough Dinar to equal their chunk, so your tax liability was just reduced??? I do NOT want the IRS to collect double tax on the same money!

This sounds like a good idea, and if my family member needs this money badly enough, they will do the deed of cashing it in.

Please, any input here would be very much appreciated. Much thanks.

[usndiver]

Any gifts over $13,000.00 are subject to a gift tax.Your best bet is to gift the IQD before the RV.

Here is a link for IRS Publication 950, Introduction to Estate and Gift Taxes http://www.irs.gov/pub/irs-pdf/p950.pdf

[RDA]

That is correct,,,,,,, double, triple,quadruple taxation........

[TimS]

Absolutely.....if you are going to give family or friends some of the RV return, it would benefit all parties to give them dinar and have them cash it in. Otherwise they will get taxed on your US dollar cash gift and you paid higher taxes than you would have by not reducing your income from the RV of a larger amount.

I believe this venture will be taxed as ordinary income, so whatever you can do to reduce it will help you from a tax standpoint

[RiverStyx]

Even if you held it now until the RV if you have it physically in your control but yes if you are going to give it to an individual ,,,,,,,,,,,,,,,,,,,,, absolutely give them the dinar to cash in.

You could however cash it in all your self and then give them several smaller amounts such as $4500 at a time just as an example. to avoid double taxes.

[vibo]

Thanks for your input !! Thinking ahead saves tax money....I LOVE IT !!

Come on RV, make my day.

[seascape61]

Absolutely.....if you are going to give family or friends some of the RV return, it would benefit all parties to give them dinar and have them cash it in. Otherwise they will get taxed on your US dollar cash gift and you paid higher taxes than you would have by not reducing your income from the RV of a larger amount.

I believe this venture will be taxed as ordinary income, so whatever you can do to reduce it will help you from a tax standpoint

I was under the impresson that it was to be a capital gains tax?

[TimS]

SeaScape61

Not according to the irs agent and two tax attorneys I talked to.....ordinary income. The IQD is not a traded currency, we aren't buying it through our broker, ect.....again, I recommend everyone find out for themselves straight from the horses mouth (IRS) what is what.......you wouldn't want your profits eaten up by tax penalties and lawyer fees because you believed somebody else?

[dinarislate]

SeaScape61

Not according to the irs agent and two tax attorneys I talked to.....ordinary income. The IQD is not a traded currency, we aren't buying it through our broker, ect.....again, I recommend everyone find out for themselves straight from the horses mouth (IRS) what is what.......you wouldn't want your profits eaten up by tax penalties and lawyer fees because you believed somebody else?

If you don't mind, can you elaborate on the tax issues. I am concerned about what exactly this investment is, and how much I will have to pay to the IRS. Is it ordinary income or capital gains?

Thanks TimS!

[BBALL99]

I have been thinking about this for a day or so. For the people who are not doing any fancy things with their Dinar, such as the Offshore Corp., ...If I were to cash in and then give a family member a chunk of it, I see two tax liabilities already. How about giving that family member enough Dinar to equal their chunk, so your tax liability was just reduced??? I do NOT want the IRS to collect double tax on the same money!

This sounds like a good idea, and if my family member needs this money badly enough, they will do the deed of cashing it in.

Please, any input here would be very much appreciated. Much thanks.

Your best bet is to have the family members buy some

Dinar for themselves before the RV, and if they are unwilling

too you should not feel obligated to give them any after

and if you still need to give, then give them the Dinar

to cash in themselves.

[brussell]

Also, based on what I've been told by my family's financial advisor, there is a $1M lifetime cap on gift value from any single source, non-taxed. So what a tax planner can do is spread a single $1M gift across multiple years, claiming the allowed $13,500 each year until the lifetime max is reached. Which would get you roughly 74 years.

I know you can amortize debts this way, but this was the first I'd heard about the practice being applied to gifts. But it's a nice bonus.

[joe liberst]

Just gift them the dinar before it revalues. Right now you can give someone a million dinar and there wouldn't be any gift tax since it is only worth 1k USD (really less than 1k).

Just write out a note saying that you are gifting X amount of IQD on XXXX Date which is valued at X amount in USD.

[YeshuasDinar]

If you were to cash in your dinar and pay the tax on it.....then later put it in gold or silver, would you have to pay tax on it again if you cashed in the gold/silver?

Or if you traded in your dinar for gold directly, would you have to pay taxes right then or later when you traded for dollars? I am sure most people aready know this, but being a newbie I am still confused.

[gtcarpetman]

You and your wife could gift each child 13k each per year. Therefore, a son and daughter in law could receive up to 52k per year, if I understand it correctly. Have a blessed day.

If you were to cash in your dinar and pay the tax on it.....then later put it in gold or silver, would you have to pay tax on it again if you cashed in the gold/silver?

Or if you traded in your dinar for gold directly, would you have to pay taxes right then or later when you traded for dollars? I am sure most people aready know this, but being a newbie I am still confused.

you would pay tax on certain gold coins. Not the American Eagle gold coin. It is not taxed, no records are required to convert that coin to cash, as well as some others.

[unclegeek]

only double? I thought we were up to 4x by now.......

[Wino]

I spoke to my accountant about this. I purchased my dinar in Jan of 07 at an exchange in Kuwait. He told me that anything I had at cash in would be considered a long term investment. It's different if you buy from a broker. If it happens this year before taxes change I'll be better off.

[LEXICON]

I have asked in other threads but no response. I am Canadian, maybe that's the problem lol Anyone have any insight as to my tax ramifications?

[vibo]

BBALL99 - The amazing fact is all my family (small) basically laughed at us, and some even 'warned us of losing money' because that sounded like a scam. I really do not feel obligated, but maybe I will rethink this and give it to the few true friends back home.

I told my husband we have to get things figured out b4 this RV occurs, such as picking out an accountant and financial planner. He always waits to the last minute for Everything, and I like to be prepared.

One thing we really agree on is We Do Not Want Any New Friends. I know how the people are around here, heck, we have lived in this state for 10 years. People here are different...not friendly whatsoever, I call them Duh-Huhs. So No New Friends.

[SAG]

I have asked in other threads but no response. I am Canadian, maybe that's the problem lol Anyone have any insight as to my tax ramifications?

Canadians pay capital gains tax on 50% of their earnings. So if you take away 1 million USD divide that in half $500,000 and you pay tax on that which is about 45.6%.

Here is a tax calculator for you. http://www.taxtips.ca/calculators/taxcalculator.htm

By the way, if the CRA decided you had full intention of earning this as income you would be taxed on the entire 1 million. They can twist the law since it's a bit vague. At the time of cash in the USD would be estimated to the equivalent value of CAD currency which is almost at par now.

So buy enought to pay your taxes.

Edited November 17, 2010 by SAG

[pourit]

Ok...here is what I did. I made up several gift letters...example...in one I gave 50,000 dinars to x...100,000, 250,000, 500,000 and 1,000,000 and so on. Had them notarized. Since I don't really know how much it will revalue for...my bases are covered. If it revalues high and I want to give X 1,000,000 ...I just give them to X and I have a gift letter stating I gave them a gift of about $1,100 (the cost of the dinars) I'll destroy the other gift letters. Now the taxes are their problem...not mine. Also...they may want gold or cash...who knows. The one negative is that they won't probably be able to "LOCK IN" the rate on cash in time till they physically arrive. POURITFORWARD PS GIVE AWAY DINARS BEFORE THE RV.

[SAG]

Your best bet is to get a tax attorney. I have researched and researched this subject. The IRS site takes you in circles and you also have to consider long term vs. short term investment. I have read so much, I should be an expert on this subject, however, at the end of the day...I realized that I just needed an attorney.

ABSOLUTELY!!!! That is where I got my information from. Find one that specializes in wealth management and corporation setup. He can help you once it RV's and before you cash in.

By the way, I am no expert, just someone who spent alot of time researching this and then went to a very good tax attorney.

Edited November 17, 2010 by SAG

[LEXICON]

Thank you! that will be my next phone call.

[ambush_gorilla]

I found this doing some taxation research at

http://www.maximadvisors.com/knowledge-library/international-tax-planning/US-Taxation-Foreign-Currency-Gains-Losses

"The general rule with regard to the U.S. tax treatment of gains or losses from exchanging U.S. currency for non U.S. currency (and back) is that the gain or loss on the currency exchange will now be taxed the same as the underlying transaction. The Taxpayer's Relief Act of 1997 included a provision [Act Section 1104(a)] that included some changes, which are included in the following explanation.

Where there are currency gains or losses in connection with a trade or business or with the management or administration of investment assets, the gain is treated as an ordinary gain (rather than as a capital gain) and any loss is generally treated as an expense.

Where currency gains or losses are incurred in connection with the purchase of an investment, the gain or loss on the currency change on realization (usually from selling) is a capital gain or loss and is included as part of the total capital gain or loss on the investment.

Currency gains of $200 or less that arise from personal transactions (not for investment or business) are not taxable, but any personal currency losses are not deductible. A personal transaction includes any gain or loss arising from travel even if the travel is business related. Any currency gains in excess of $200 per transaction (per trip or per purchase) are treated as a capital gain. Losses on currency exchanges for business travel also appear to be non-deductible.

The primary source of information on the tax treatment of currency gains or losses is IRC Section 988."

Hope this helps

Ambush