Accountants Capital or Reg Income

[Bambino3]

Folks, I purchased my first dinars in August, then I bought some every month until January. My question is this LIFO - last in first out, or is it based on the specific order that I placed and have record of.

So, if I bought 3 mill on August 15, can I cash in on August 17 and have that be a Capital Gain, and then keep cashing in as the date exceeds a year. Or, will they go by the last purchase. There is a big difference 20%. We are older and really need to get off this ride. I think it is going to happen soon. Not sure what I would do, regardless. I do feel that somebody has to pay taxes and it can not always be the other guy. I, also, heard that currency transactions have a different criteria, but nobody seems to know. Yes, I will go to my lawyer, but this may help all of us to get an intelligent answer now. Thanks. Don't buy because you sense I feel this is imminent.

[usndiver]

ExecConsultant has covered this topic in the Tax Discussion Forum of DV. He is an attorney and has contacted various IRS employees for answers. According to his research this investment will be treated as ordinary income under Section 988 of the Internal Revenue Code. You can do a search of his posts in the aforementioned forum, they are very informative.

[Solarcloud]

ExecConsultant has covered this topic in the Tax Discussion Forum of DV. He is an attorney and has contacted various IRS employees for answers. According to his research this investment will be treated as ordinary income under Section 988 of the Internal Revenue Code. You can do a search of his posts in the aforementioned forum, they are very informative.

Does this mean if I am in Washington where there is no income tax I won't have to pay 35% to the feds?

[usndiver]

Does this mean if I am in Washington where there is no income tax I won't have to pay 35% to the feds?

Two things are certain, death and taxes!

[Bambino3]

ExecConsultant has covered this topic in the Tax Discussion Forum of DV. He is an attorney and has contacted various IRS employees for answers. According to his research this investment will be treated as ordinary income under Section 988 of the Internal Revenue Code. You can do a search of his posts in the aforementioned forum, they are very informative.

Thanks for your response. Went to the tax forum. Less than a year 35%, more than a year 15%. But my question was, I made 5 purchases. Are these viewed as separate transactions? So, each purchase transaction date is the date of the investment-not the last date I bought dinar? So on August 17, I can cash in 3 mill and pay 15%. Then I wait for the other purchase dates to mature.

This is not covered in the tax forum that i have seen. Thanks.

[Solarcloud]

Two things are certain, death and taxes!

So confused.

[Bigboy0854]

ExecConsultant is doing more research on this issue & hopes to have an answer in June

Also if we find out that the Capital Gains rules apply then the exact date of purchase would be used to determine the holding period for short or long term gains. In other words it would be treated like any other investment. Stay tuned.

[Carrello]

Thanks for your response. Went to the tax forum. Less than a year 35%, more than a year 15%. But my question was, I made 5 purchases. Are these viewed as separate transactions? So, each purchase transaction date is the date of the investment-not the last date I bought dinar? So on August 17, I can cash in 3 mill and pay 15%. Then I wait for the other purchase dates to mature.

This is not covered in the tax forum that i have seen. Thanks.

Yes, these are separate transactions. But you need to research whether or not it is a capital gain. There has been much discussion on this, and some professionals, Exec Cons for one, says it will be taxed as regular income. Then the only worry you have is to pay the IRS 35%.

ExecConsultant is doing more research on this issue & hopes to have an answer in June

Also if we find out that the Capital Gains rules apply then the exact date of purchase would be used to determine the holding period for short or long term gains. In other words it would be treated like any other investment. Stay tuned.

Just to add to this, Mark, ExecConsultan,t is an estate, tax attorney out of Kansas. He is a member here and other sites and very much aware of the the questions we have regarding the IRS. He has spoken with IRS agents regarding this issue and has been told we will be paying regular income tax on our gains. It makes no sense to me and nothing would make me happier than paying only 15%.

Let's see what Mark comes up with in June. He is very helpful and a very nice person.

[po'boy]

Does this mean if I am in Washington where there is no income tax I won't have to pay 35% to the feds?

Don't you file a Fed income tax return every year? Because a state has no income tax doesn't have anything to do with the federal tax system. The state I live in has no income tax either, but I managed to let Uncle Obama keep 12% of my income last year.