Exchange Taxes

[ambush_gorilla]

After over an hour and speaking with 7 different agents at the IRS. I finally got a straight answer. IRS publication 525 page 33 about half way down the page states......"If you have a gain on a personal foreign currency transaction because of changes in exchange rates, you don not have to include that gain in your income unless it is more than $200. If the gain is mor than $200, report it as a capital gain."

The publication is available for download at www.irs.gov, just search publication 525.

I hope this puts to rest some of the misinformation on income/capital gain taxes.

All the best,

Ambush

[nate dog]

This is good for us,right?

[ambush_gorilla]

Your talking 30-35% on income taxes and 10-15% on capital gains.......I'll take the capital gains.

[Aunt Bee]

Thank You Very Much for that information and all your trouble.

[Bocadinar]

good job, thanks

[larry143]

I may be wrong but I was thinking a short term capital gain (invested in under 1 year) is considered as income by the IRS. Someone smarter than me may differ....

[Chefboyrd]

This is good for us,right?

The way I see it is that it will be a straight Cap Gains Tax , Where as if it would be treated as Ordinary Income we could have more write off? JMO ,not sure if it is correct. I have a prepaid legal plan and I am using it to get as much tax info as possible, However as a few of the ppl on here who know much more then me have stated , most attorneys might not even know the answers ,so thank you for the the above info as well as spending time on the phone with the IRS Aloha!

[dinar4.20]

This is good for us,right?

Good if you have held for 1yr or more..15%.(goes up in 2011). Cap gain when held less than a year is equiv to ordinary income tax bracket of 35%.

[Chefboyrd]

Your talking 30-35% on income taxes and 10-15% on capital gains.......I'll take the capital gains.

As will I

Aloha !

[ambush_gorilla]

I suppose my next question is.... How can they verify when you purchased your dinar? Especially if you didn't buy it through DT or some of the other sites out there. Say for example the individuals that have purchased their dinar in country......where's the proof?

[hspotman]

Your talking 30-35% on income taxes and 10-15% on capital gains.......I'll take the capital gains.

I may be wrong but I was thinking a short term capital gain (invested in under 1 year) is considered as income by the IRS. Someone smarter than me may differ....

If it is capital gains, we are looking at 15% taxes if we' ve held the dinar for a year or more, or 30%-35% short term-less than a year. But I also don't know what it will be post rv,once we have all been lifted into the higher tax brackets. Your tax guy will know, find a good one!

[ambush_gorilla]

I thought capital gains where 10-15% regardless of tax bracket. But I could definitely be wrong

[TR8Man]

Ambush_Gorilla - "...damn fine work.. " I had been given the same information / advice by someone whom I trust, though with your tenacity and ....damn fine work.... I am a believer....

Thank you for this update.....and.....damn fine work.....

Edited November 23, 2010 by TR8Man

[Draco]

Hi guys. Not trying to rain on the Dinar parade here. But I have read a bunch of ExecConsult post about this and his view is that it will be treated as regular income. This is a non functioning currency, so it does not fall under cap and gains. He post under Tax discussion on the main page. The guy knows his stuff and has spent a bunch of time looking into this. Check it out for youself. I too wish it was a capital gain. But I would rather pay the regular income tax now and find out I over paid later. If you pay the 15% and they catch up with you six or eight months down the road, the cost may be real big. Just check out what he talks about before you make a choice on the way you pay taxes. Also as everyone else has said get tax help. Good luck and GO! RV.

Draco

[hspotman]

I thought capital gains where 10-15% regardless of tax bracket. But I could definitely be wrong

You may be right on the tax bracket issue, but I know it is 15% long term and either 30% or 35% long term...or at least it was.

[ambush_gorilla]

Hi guys. Not trying to rain on the Dinar parade here. But I have read a bunch of ExecConsult post about this and his view is that it will be treated as regular income. This is a non functioning currency, so it does not fall under cap and gains. He post under Tax discussion on the main page. The guy knows his stuff and has spent a bunch of time looking into this. Check it out for youself. I too wish it was a capital gain. But I would rather pay the regular income tax now and find out I over paid later. If you pay the 15% and they catch up with you six or eight months down the road, the cost may be real big. Just check out what he talks about before you make a choice on the way you pay taxes. Also as everyone else has said get tax help. Good luck and GO! RV.

Draco

I thought the same thing until I read it in the publication......it's hard to argue with black and white

[hspotman]

Ok. look everyone....let's all stop trying to milk as much from this inevitable huge income as you can. Regardless of whether it is "regular income", "capital gains", 15% or 30%......you/we/I are all going to have way more money than we've ever dreamed of if this all goes right. No need to be greedy here. I'm getting ready to have maybe 45% taken away from my initial proceeds due to taxes. i will still be able to retire if need be. But I won't because that will be too boring of a life.

[markst]

Let's just hope that Obama extends the BUSH Tax Cuts....

[ThankAVet]

That rule applies to those who exchange a nominal amount of currency, as when visiting a country. It does not apply in our case.

It's been stated over and over again in this forum and others that any gains from a currency revaluation such as this one would be treated as straight income. Nothing to do with capital gains.

But if anyone here is taking the advice from some unknown person online that you know only by Ambush A Gorilla or Thank A Vet, etc., they are asking for trouble.

The first three things you want to do upon an RV of a substantial nature:

1. Contact a Tax Attorney in your area that is familiar with this type of transaction.

2. Contact an investment planner.

3. Contact a CPA.

There are so many things you can do to put you in a better position in terms of taxes and long term wealth generation / protection, you'd be a fool not to consult professionals in each of these fields. You could end up costing yourself a ton of money without the correct advice. Listen to what these three people have to say and ask plenty of questions.

And don't forget to either get a will prepared or to update your current will. No will = potential HUGE PROBLEMS for your kids / loved ones when you die. There are ways to set up your estate so that your family gets significantly more of your $$ when you die. Fail to do this and Uncle Sam will get far more than he has to. And while you are preparing for the days you'll no longer be here, do family a favor and get long term care insurance coverage so that your new found fortune doesn't get wiped out in a potential years long stay in an assisted care / nursing home facility. Medicare won't kick in until ALL of your money is gone.

DON'T GO IT ALONE ON THIS. GET THE PROFESSIONAL HELP YOU NEED TO ENSURE YOUR WEALTH IS PROTECTED AS MUCH AS POSSIBLE.

[Floridian]

After over an hour and speaking with 7 different agents at the IRS. I finally got a straight answer. IRS publication 525 page 33 about half way down the page states......"If you have a gain on a personal foreign currency transaction because of changes in exchange rates, you don not have to include that gain in your income unless it is more than $200. If the gain is mor than $200, report it as a capital gain."

The publication is available for download at www.irs.gov, just search publication 525.

I hope this puts to rest some of the misinformation on income/capital gain taxes.

All the best,

Ambush

There are short term Capital Gains and long term Capital Gains. If you have held your dinar less than a year the tax is 35%. If you hold your dinar more than a year, the tax is 15%.

[Draco]

He wrote full pages of that pub and explained why it is ordinary income, He will also answer any questions you want to asked. All I am saying is be SURE you are right. I really wanted to just pay the 15%. But after reading pages of his comments, I will pay the 35% FED and 7% State. Just take time to check out what he has spent many hours on.

Draco

[TimS]

My ex-irs agent told me since the IQD is not a "traded" currency that it does not qualify for cap gains, rather ordinary income......However, he is an "ex" irs and maybe the law has changed since his day. Sounds like you read nfrom a publicatioon that specifically mentions "currency that revalues" such as ours.....

Once again....can nothing with this RV be cut and dry......

I agree with those who say, better to pay ordinary income taxes initially, then be surprised to get a refund if we are wrong later than the other way around.

Isn't there an "active" irs agent among us that "knows" the right answer....definitely?

[GolferDan]

This would pose an excellent topic . Lets say you only cash in a couple of notes if like myself have owned my investment less than a year .. 1st year I pay the short term capital gains tax of the tax bracket I am in .. but wait till next year to cash in the balance .. the rest of my investment is now considered long term capital gains and that would be the 15% at current or 20% for 2011 if the Tax Reconciliation Act does not get extended.

[ambush_gorilla]

Ok. look everyone....let's all stop trying to milk as much from this inevitable huge income as you can. Regardless of whether it is "regular income", "capital gains", 15% or 30%......you/we/I are all going to have way more money than we've ever dreamed of if this all goes right. No need to be greedy here. I'm getting ready to have maybe 45% taken away from my initial proceeds due to taxes. i will still be able to retire if need be. But I won't because that will be too boring of a life.

Agreed......BUT, I've fought for Uncle Sam every day for over 10 years now, and I want to have my ducks in a row. Undeniably there is a huge difference between 15 and 30%. Just trying to get info out there and help, just like most on here.

All the best

[Chefboyrd]

Ok. look everyone....let's all stop trying to milk as much from this inevitable huge income as you can. Regardless of whether it is "regular income", "capital gains", 15% or 30%......you/we/I are all going to have way more money than we've ever dreamed of if this all goes right. No need to be greedy here. I'm getting ready to have maybe 45% taken away from my initial proceeds due to taxes. i will still be able to retire if need be. But I won't because that will be too boring of a life.

Actually I have not had very much to put into this investment so I will try to save as much as possible because I will not be able to "retire" with what I have invested, oh yeah unless TK is correct @ $ 9 RV then thats different.

Is that you on that wave Hspotman? nice little left there.

I agree even if I could retire I surly would not. waaaaaaaaaay tooo boring

Aloha!