Exchange Taxes

[Draco]

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.

I am with you on this. Even at 45% you should have plenty left for the good life. And it beats the hell out of losing it all and going to jail.

Draco

[hspotman]

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!

Yea,that was one of the only pics I could fit as my avatar. I wanted one of me in a barrel on the inside of that break, but that one(picture) was too big(pixels). I do miss Hawaii waves, but if you can get used to the colder water, San Diego has some pretty fun ones too

[ambush_gorilla]

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?

I'm under the assumption that once the Dinar RV's then it would be a "traded" currency......but you know what they say about making assumptions

[larry143]

I don't get why some think retirement equals BORING. I guess some think when you retire, you have to do NOTHING. We just think...retirement means being able to DO soooo much for others, helping them, getting envolved, fishing, traveling, gifting to strangers in need....and on and on. Nothing boring there my friends. God bless and Enjoy the GAME on Thursday!!!! Go Boys!!!!!

[Chefboyrd]

Yea,that was one of the only pics I could fit as my avatar. I wanted one of me in a barrel on the inside of that break, but that one(picture) was too big(pixels). I do miss Hawaii waves, but if you can get used to the colder water, San Diego has some pretty fun ones too

I lived in SD for approx 8 years, been here in Hi now 16 yrs That left looks like a break that starts with a B and has a lot of climbing involved in getting back from there.

SD has a lot of great spots, I don't miss the cold water though. I do miss the skiing in the winter. I apologize to all for hijacking the thread, Just wanted to say Aloha to Hspotman

Aloha

[Draco]

I'm under the assumption that once the Dinar RV's then it would be a "traded" currency......but you know what they say about making assumptions

He "ExecConsut" also covered this because someone asked about after it become a tradeable currency. It still will not be cap and gains. The reason why I have forgot by now. All the questions you could ask about this tax problem, he covers a bunch. You just have to go through the posts. I spent hours reading it. Very good free info. Check it out if you have time.

Draco

[hspotman]

I don't get why some think retirement equals BORING. I guess some think when you retire, you have to do NOTHING. We just think...retirement means being able to DO soooo much for others, helping them, getting envolved, fishing, traveling, gifting to strangers in need....and on and on. Nothing boring there my friends. God bless and Enjoy the GAME on Thursday!!!! Go Boys!!!!!

YES!!!!! All-be-it our season is most likely shot now. Even a win-out will require too much help....

I lived in SD for approx 8 years, been here in Hi now 16 yrs That left looks like a break that starts with a B and has a lot of climbing involved in getting back from there.

SD has a lot of great spots, I don't miss the cold water though. I do miss the skiing in the winter. I apologize to all for hijacking the thread, Just wanted to say Aloha to Hspotman

Aloha

No it's not BR, that wave is soft IMHO. Being from Hawaii, my pic comes from a wave that is in probably the top 5 heavier waves in SoCal.....maybe number 4 or 5.

[syzygy]

Profits from sale of currency purchased as an investment is taxed as ordinary income and treated as interest under Section 988 of IRS code. This is a maximum of 35% for federal tax in 2010 and whatever your state tax is - if you have state tax. Do not forget to file and pay estimated taxes for state (if applicable) and federal for 4th quarter 2010 when this RV's before the end of 2010.

http://en.wikipedia.org/wiki/988_transaction

[TimS]

What the agent meant was....we didn't buy our cuurency through a broker as it was traded on an exchange such as the forex....rather we speculated by buying from some bank or dealer whom sold us paper not good anywhere but in Itraq. Now, when the dinar RV's, we won't be selling it on the forext, rather we'll be exchanging at some bank (or a dealer who will do the same thing) for an exchange rate.....so in affect, we did not buy our dinar through a valid market and then sell it at a profit through that existing market like if you did this with say, the french franc. If you snapped up 10, 000 ff a year ago on the forex, then sold it tomorrow for a profit w=you would pay long term capital gains....not so with the dinar says the ex-irs agent......it's the legality of the market mechanism.

Again, not my area of expertise...but that's waht he told me

[Draco]

Profits from sale of currency purchased as an investment is taxed as ordinary income and treated as interest under Section 988 of IRS code. This is a maximum of 35% for federal tax in 2010 and whatever your state tax is - if you have state tax. Do not forget to file and pay estimated taxes for state (if applicable) and federal for 4th quarter 2010 when this RV's before the end of 2010.

http://en.wikipedia.org/wiki/988_transaction

That is my read on it also. Thanks for backing me up syzygy!

Draco

[Chefboyrd]

YES!!!!! All-be-it our season is most likely shot now. Even a win-out will require too much help....

No it's not BR, that wave is soft IMHO. Being from Hawaii, my pic comes from a wave that is in probably the top 5 heavier waves in SoCal.....maybe number 4 or 5.

No not BR the one I was thinking of is in close proximity to UCSD , IMO that would be close to a HI wave.

I agree with larry143 that is my idea of retiring that and traveling the world to surf of course

[Draco]

What the agent meant was....we didn't buy our cuurency through a broker as it was traded on an exchange such as the forex....rather we speculated by buying from some bank or dealer whom sold us paper not good anywhere but in Itraq. Now, when the dinar RV's, we won't be selling it on the forext, rather we'll be exchanging at some bank (or a dealer who will do the same thing) for an exchange rate.....so in affect, we did not buy our dinar through a valid market and then sell it at a profit through that existing market like if you did this with say, the french franc. If you snapped up 10, 000 ff a year ago on the forex, then sold it tomorrow for a profit w=you would pay long term capital gains....not so with the dinar says the ex-irs agent......it's the legality of the market mechanism.

Again, not my area of expertise...but that's waht he told me

Thanks TimS. That was the part I could not remember about after it is traded. We never did trade it. So we still pay on it as regular income.

Draco

[hspotman]

No not BR the one I was thinking of is in close proximity to UCSD , IMO that would be close to a HI wave.

I agree with larry143 that is my idea of retiring that and traveling the world to surf of course

Ahhh... Blacks. You don't have to be secretive of naming that spot, that wave is world renowned. I've actually been going down there alot the past few weeks because of being so small here lately. But the place I named before is about 1/4 mile north of BR . You've been in Hawaii 16 years? I've been in SD for 21, so if you've been to where I described when you live here, chances are that we've met. That is usually the only spot I'll surf

Aloha

[larry143]

Aren't we all blessed. We got it all figured out now. WE'LL......

Be able to share our dreams now...and hopes for the future RV....whether it's surfing, fishing, traveling, SHOPPING (man stuff, guys...like teh motor home, bass rig, Infiniti FX50, etc), giving....

Pay our taxes, WHATEVER they are, the pros we hire will guide us there...

Witness the RV and the excitment to follow.

Live our DREAMS, Take time to slow our lives down if we like, get off the frickin daily s/market.

And if by His will...it doesn't do all that....how many other folks have got to share this much excitement and anticipation? God Bless us All.

PS Super bowl....Boys are gunna be there....right? (no bashing, we are friends)

[Chefboyrd]

Ahhh... Blacks. You don't have to be secretive of naming that spot, that wave is world renowned. I've actually been going down there alot the past few weeks because of being so small here lately. But the place I named before is about 1/4 mile north of BR . You've been in Hawaii 16 years? I've been in SD for 21, so if you've been to where I described when you live here, chances are that we've met. That is usually the only spot I'll surf

Aloha

I know it is just "IMO" not cool to name spots famous or not, I have an uncle in Santa Barbara who takes me to the Channel Islands and north of SB , No way would I be mentioning any surf spot names , those guys get all nuts and stuff .

Yes I pretty sure I know where you are talking about a 1/4 N of BR and I have surfed there, Anyway good to have met you on here if not at that spot.

Aloha

[Bill K]

I'm a Tax Accountant, it you have held it for less than one year and one day it is a short term capital gain the tax is 35% no matter the tax bracket plus whatever you state tax is on capital gains. In Missouri that would be 6%.

Edited November 23, 2010 by Bill K

[hspotman]

I'm a Tax Accountant, it you have held it for less than one year and one day it is a short term capital gain the tax is 35% no matter the tax bracket plus whatever you state tax is on capital gains. In Missouri that would be 6%.

Yea, that's what I thought. Thanks for the update to that. You're lucky with the 6%, CA has a hefty 10% or even 11% maybe. But I'm not worried about the taxes on this, I'm worried about actually making what we all hope to make. So I'm either going to be paying $2,760,000 in taxes ( or thereabouts) or $2760

[Marilyn53]

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.

Yes, this is all great advice! At the end, I think you mean that MEDICAID won't kick in until all your money is gone BUT YOU DO HAVE TO REMEMBER....like this great posts says ...do your homework and you should also remember that MEDICAID has anywhere from three to five year lookbacks (DEPENDING UPON THE STATE YOU LIVE IN). In otherwords, if you transfer anything or sell anything within that time frame, you got to come up with the money or they won't cover you. Hey, it is a catch 22 unless you do plan ahead. I already had to go through this with my Grandmother....thank goodness she is past the "look back time."

[larry143]

5 year "snap shot" back look time I think.

[ds2]

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

some say you will be taxed according to what tax bracket you fell in when you filed your taxes for '09.

[Draco]

some say you will be taxed according to what tax bracket you fell in when you filed your taxes for '09.

That would be nice for some I guess, but I think it will just be, you made X amount of dollars and this is what bracket you fall in. And we will all be in the top "35%" bracket if this goes as planned.

Draco

PS Unless this goes into next year and I hope it does not. May be 38% if they do not keep the Bush tax in place.

Edited November 23, 2010 by Draco

[krmayo]

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

Is this under our current tax system or the one coming up next year when the tax breaks expire?

[Hawaii K]

HSPOT!

Howsit!

Oh yeah, The K is, I was born Kaneohe, last name is Koahou.

I married a Haloe' girl from VA, so I am stuck here Bruddah.

Aloha/God Bless and you and your family have a wonderful

ThankGiving

HSPOT!

Howsit!

Oh yeah, The K is, I was born Kaneohe, last name is Koahou.

I married a Haloe' girl from VA, so I am stuck here Bruddah.

Aloha/God Bless and you and your family have a wonderful

ThankGiving

Ambush thanks for the Info Bruddah.

Aloha!

K

[hspotman]

HSPOT!

Howsit!

Oh yeah, The K is, I was born Kaneohe, last name is Koahou.

I married a Haloe' girl from VA, so I am stuck here Bruddah.

Aloha/God Bless and you and your family have a wonderful

ThankGiving

HSPOT!

Howsit!

Oh yeah, The K is, I was born Kaneohe, last name is Koahou.

I married a Haloe' girl from VA, so I am stuck here Bruddah.

Aloha/God Bless and you and your family have a wonderful

ThankGiving

Howzit!

You're stuck in Kaneohe or VA?

Lol, I remember in high school(where'd u go and what year u grad?), at all the parties were either ambushed by Kailua/Kaneohe people if it was in Hawaii Kai, or vice/versa . Those were the days!

BTW- I grad Kaiser in '87. Maybe if we're the same age, we may have seen each other at parties, lol....or you mighta kicked my a$$ at one of them lolol That happened before . You know the Hawaiian attitude....can't make eye contact for more than 2 seconds without the other guy thinking, "WHAT, YOU LIKE BEEF??" Lmao!

[rjboots1]

Ambush_gorilla, I appreciate the time you spent talking to the IRS agents, many of which are complete ignorant bozo's that could never cut it in the private sector, but the info that they gave you is WRONG!

And the problem is that this is not a "personal" transaction. It is an investment. And as such does not fall under the section 525 of the IRS code that you stated. It falls under section 833, and is taxed as "regular income".

If you only pay the capital gains rate, in about 2 years the IRS will come back to you, tell you that you owe them the additional dollars, plus interest, plus penalties, and it will end up costing you over 50% of your profits.

Just pay them the 35% as soon as you cash in your dinars and be done with it. If the IRS subsequently makes a ruling that you owe less, (not likely), they will send you a refund. Just pay it and forget it.