CONGRESS TO ADD EXTRA TAX TO INVESTMENT

[Xuk]

H.R.-62 does not apply to the individual citizens holding the Dinar. For us it will still be considered capital gains.

[Bigboy0854]

Be careful Xuk about it being considered as capital gains. I'm a CPA that has spoken to tax professionals and the IRS. The tax treatment is up for debate on it being oridinary income versus capital gains. My point is that we will most likely have to wait until after the RV to get a certified letter from the IRS.

[Xuk]

I have had this discussion with my CPA and Tax attorney and until there is specific changes in the code we will be treating this investment as capital gains.

Dealing with the FEDS is risky business and you should not consult with or put into thier minds any uneeded knowledge. They will literally make **** up and it is never to the common mans benefit.

[Bigboy0854]

XUK,

Read internal Revenue code Section 988

http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._988._Treatment_of_certain_foreign_currency_transactions

In summary:

a) General rule

Notwithstanding any other provision of this chapter -

(1) Treatment as ordinary income or loss

(A) In general

Except as otherwise provided in this section, any foreign

currency gain or loss attributable to a section 988 transaction

shall be computed separately and treated as ordinary income or

loss (as the case may be).

[NYer]

I sked my friend who is a tax attorney (and a dinar holder) to review this. His comments:

I took a quick look at the bill. First, it is only a bill in the house (sponsored by a Democrat in a Republican controlled House). Second the tax is 0.5%, and I don't think it applies to us. Third, it is only effective (as currently drafted) to transactions (cash out date) occurring after 12/31/2011.

‘ Currency Transaction- For purposes of this section--

‘ IN GENERAL- The term ‘currency transaction’ means--

‘the exchange of any currency for another currency, and

‘ entering into any currency derivative.

‘CURRENCY DERIVATIVE- The term ‘currency derivative’ means--

‘ any currency notional principal contract, and

‘ any option, forward contract, short position, hedge, or similar financial instrument with respect to any currency or currency notional principal contract.

This is the operative language from the bill. Note that a currency transaction means BOTH an exchange of currency for another currency (we have that) AND a "currency derivative." The definition of a currency derivative is a financial contract that we do not have. Ours is a "long position" in the IQD. So unless IRS regulations define us in, I think we are out.

[Bigboy0854]

NYer,

I hope your Tax attorney is right.

FYI - The bill states 0.005 percent not 0.5 percent. Here is a copy of the text:

`(1) IN GENERAL- The amount of the tax imposed under subsection (a) with respect to any currency transaction shall be equal to 0.005 percent of the value of the currency acquired in the transaction.

[Xuk]

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

A 988 transaction refers to 26 USCA Section 988[1] of the Internal Revenue Code in the United States of America. This transaction occurs when a taxpayer enters into or acquires any debt instrument, forward contract, futures contract, option, or similar financial instrument held in a non-functional currency.[1] It shall not apply to any regulated futures contract or non-equity options which would be marked to market under 26 USCA § 1256[2] (1256 contract) if held on the last day of the taxable year.[1]

http://en.wikipedia.org/wiki/Functional_currency

Would the Dinar be considered a functional currency and not a non-functional currency?

Accounting terms are not my forte but the wording on IRS codes and sections are pretty confusing.

[markh256]

I do not trust our Goverment. I do not like paying all the taxes I do now. But if there is an added tax to this investment so what... The US spent alot of money to free Iraq and to keep our troops there. if it wasn't for our actions to free Iraq we would't had a shot at making a dime on this thing.

The point I am tring to make is this .... if this thing RV's at close to $1 and I bought 1million Dinars and the Goverment took 50% off the top I still have $500,000. cash in hand. Where else would you ever make anything close to that kind of profit on a $1200 investment. Just injoy the ride.

Have a Blessed day

Mark :

[

PS Make sure you give some of your blessing to groups like Wonded Worriers or the USO .... Give to the orginzations who support our troops. They are the ones who God used to get this blessing to you .

[tankdude]

PS Make sure you give some of your blessing to groups like Wonded Worriers or the USO .... Give to the orginzations who support our troops. They are the ones who God used to get this blessing to you .

Good call - especially the Wounded Warrior Program in my opinon. They've helped a number of my buddies. They're already getting some from me - but they're going to get more. Another I would toss out is IAVA - Iraq and Afghanistan Veterans Association. Just my personal opinions.

[Bigboy0854]

Dinar would be considered non-functional currency because a US citizens functional currency is the USD. In other words functional currency is currency used by a country in normal trade.

[Xuk]

Thanks Bigboy. =)

[Artitech]

I like that ideal of helping our veterans Mark and since Im one, I will, but I dont want to pay one more dime than I have to. our government that is out of control. So I suggest if you want to give the U.S. treasury a tip then go ahead, since we are spending YOUR money let me suggest the tip how about 90% to U.S.T. you keep your 10% and have a wonderful life.