REAL TAX INFORMATION

[ExecConsult]

Hey Mark,

I have been reading your posts and have found your information very useful. I was wondering if you could possibly shed some light on my scenerio.

I was turned onto investing in the Iraqi Dinar in 2004 by a few fireman co-workers of mine that were veterans of the war in iraq. They convinced me to take a chance on it and told me to just put it away and sit on it until things stabalize in the region. As of right now I am excited about the wait and possibilities of what lies ahead!

I wound up buying 1 million dinar and like I said, have been sitting on them for 6 years already. I bought them off an Online website(25,000 bills), and paid a transaction fee and tax. Where does that put me as far as Capital Gains or Ordinary income tax? If and when I cash out back to USD, am I going to be paying 15% tax or 35% tax on the conversion to USD?

Obviously we all want to find a way to pay as less as we have to in taxes. Just wondering what would happen with me, and my best options!

thanks,

-Chris

I'm glad you have found my posts helpful. I can't imagine riding the roller coaster for 6 years. You deserve an RV.

My analysis says 35% ordinary income plus any state and local taxes on ordinary income. There are "some" things that can be done to reduce taxes but they would really depend on your personal circumstances, goals, family, etc....

Best of Blessings,

Mark

[fireguy7]

I appreciate your prompt reply, Im wishing the best for everyone who has taken the risk, bc yes there are plenty of people who know alot about this......but honestly, there are even more people out there who have no clue what you are talking about......ive mentioned my story to average people out there and they kinda laugh at me when i say what I have done and what I expect.....but to tell u the truth, im just glad to be "in the game" instead of being on the "Outside looking in" and cant wait to see what actually happens.......either way i see that iraq is settling down and things are gonna stablize in the region...

[Rome M]

I know a small amount of the IRS codes about overseas earned income, considering I work in Kuwait and my income is tax free.

NOTE: income below $80,000 is tax free (above $80000 must be taxed), only if you are out of the states for no less than 335 days (I think that is about right).

SO, my money I purchased the dinar with was tax free money, AND it was not even purchased with US currency ( I used KWD).

I wonder, is there a loop hole we can find for those of use that are in this situation?

Does it say anything about tax exempt money making a profit on foreign currency/ investments/ capital gains?

Just a thought, might get shot down, but hell, worth lookin into.

[jrcrna]

mark, thanks for sharing your expertise with us. I am in ohio, bought dinar recently, assuming the RV occurs, and i cash in within 1 yr...should i expect to pay fed tax of 35% on my profits? Plus ohio tax? I am in a high tax braket for 2010. Sorry if this is redundant. thanks, JR

[ExecConsult]

mark, thanks for sharing your expertise with us. I am in ohio, bought dinar recently, assuming the RV occurs, and i cash in within 1 yr...should i expect to pay fed tax of 35% on my profits? Plus ohio tax? I am in a high tax braket for 2010. Sorry if this is redundant. thanks, JR

According to my analysis of the tax code, that is correct.

Best of Blessings,

Mark

I am a retired member of the US Army, because I was medically retired this past April due to a lower back/leg injury I suffered while serviing in Iraq... I actually had 0 fees associated with my acquiring of IQD since I got it in Iraq. Since I did not have any fees that would be deductable I am thinking from your post I am good for capital gains tax.... Would this fit your bill of the exotic vacation to the Iraqi Desert?

Thanks for your time, and I understand your post is not professional advice just wondering your thoughts.

Iraqi Vet05-07

(Since I originally answered your question, I've done a little more digging into it and would like to add something.)

It is really going to be a factual question, meaning the answer will be based on the facts. If you are claiming that you had Iraqi dinar to be able to operate from day to day, that would be a "personal transaction" and would receive capital gains treatment. However, if you have 15 million IQD tucked under a mattress back in the states, you are going to have a problem claiming that it was for day to day expenses in Iraq. If you are claiming "personal transaction," you should be able to factually support your claim in the case of an audit.

Best of Blessings,

Mark

[vietnam1969]

Thanks Mark for your amazing job of digging a little deeper on this subject. Sounds to me that you have done your homework on this. Would be glad to talk to you after RV. Email address is on my profile.