capital gains tax info

[compassion]

Taxguy is right in what he says and there is no such thing as a simple tax question!! Your entire situation has to be looked at to determine the correct answer to any tax question. Even such a simple question as "Can I claim my son, Johnny as a dependent?" does not have a simple answer without knowing additional information. No section of the tax code is stand alone-most sections have exceptions and the exceptions have exceptions. There is no way that your tax questions can be answered properly on any forum--see a tax professional!!

I would agree with you.

Now, let's add the IRC 1256 into this equation. If the IRC 1256 Election is just that, an election, something I elect to take, as they have given this alternative as well, what are your thoughts on this TaxGuy?

And thank you for these interesting posts. Lot easier than going to the books right now. And I WILL ask my tax professional as well, but nice to have a little basic understanding of the words used so we can get a grip on this.

God's Grace and Love, you are in my prayers!

Blessings, lar

[vendad]

Darkstar,

I want to say that when I posted the Al Capone comment I was wanting to get a rise out of some of the folks expressing the opinion contrary to yours and I fully expected to get "blasted" by you.....well, you didn't blast, and no I do not know the details of why Al Capone was convicted, other than watching the movie....so my hats off to you for not abasing yourself in reply...although the tone of your stance is very challenging....and what you are saying is very interesting....and I DO get your point..

Be blessed

[Leroy2u]

“The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end; there it is.”

Winston Churchill

For those of you that may want to test your knowledge about the Federal Income Tax, please follow the link below. I think you will find it very illuminating. Take the test and see how you do.

http://www.howyoubecomeliable.com/

I read this and it does bring up some interesting points, and I did suprising good with the quiz, 13 of 19 correct. Have you used this strategy in the past with you dealing with the IRS? And if so have you been successfull to this point?

Thanks...

[gar]

post something to try and inform people who have some questions and look out! post sits un-noticed for a long time and then pow!! turns into a shouting match of i know more than you and you don't know squat. bla bla bla. kind of sorry i posted it.

[LazySusan]

gar, look at it this way. .... you brought up something that needed to be discussed and talked about. Don't be sorry you posted it, and don't stop posting. Everyone is reading it. It's typical though, the people with strong opinions will post, either negative or positive. Usually the negative ones though are the ones who say nasty things. Ignore those ... they probably do that to every body and every thing. They're the "Glass half empty" crowd and personally, I don't let those types influence my thinking. Just don't be one of them either

[lancer22]

Hello

Capital gains tax rates for capital assets (such as IQD purchased as an investment) that have been held for less than one year are the same as the tax rates applicable to ordinary income, such as wages. Long term capital gains tax rates apply to gain from the sale of capital assets held a year or more and are lower, as noted in gar's post.

However, one item which needs to be taken into consideration is the Alternative Minimum Tax (AMT), which will apply to you if your income, including any gain from the sale of IQD, is above $150,000. The AMT is basically an alternative or parellel tax structure that Congress set up in the 1970's becuase they thought some taxpayers with high incomes but lots lots of deducutions were not paying their fair share. The AMT system has fewer deductions and a lower top rate. In effect, taxpayers need to determine their tax liability under the regular method and the AMT method and pay based the higher of the two tax liabilities. The AMT is very complicated and you should discuss it with a CPA or a tax attorney.

The impact of the AMT is that for taxpayers with income between $150,000 and $415,000, the actual tax rate for long term capital gains is between 21.5% and 22%, rather than 15%. For taxpayers with incomes over $415,000 the actual tax rate for long term capital gains is 25%, not 15%.

I think that a lot of people who have held the IQD for more than a year are counting on paying 15% tax, when the actual tax rate will be determined under the AMT and, for people with enough IQD to have a gain in excess of $415,000 (which would be most people), will actually have to pay tax at the rate of 25%. They still get a better rate than the the top mariginal tax rate under the regular income tax of 35%, just not as low as the long term capital gains tax rate of 15%.

I hope this helps.

Im not planning on "selling" my IQD's but "exchanging" them. My understanding is the tax code is very different based on this currency exchange not sale....

[darkstar]

taxguy et al,

I never said the Federal Government doesn't have the authority to levy a Federal Income Tax. I never said it was illegal or that it was unconstitutional.

Of course the Federal Government has the authority to levy a Federal Income Tax. They have this authority of course under the 16th Amendment, but really the authority comes from Article IV, Sec 3, Clause 2.

"The Congress shall have power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State."

The other Property they are referring to is contract agreements, such as "employment" with the Federal Government, or, in the case of a W-4 pursuant to 26 USC 3402(p)(3), a voluntary submission of a W-4, which allows one to be TREATED AS IF he were an "employee" receiving "wages" by and "employer."

Again I ask the forum, are you all familiar with the definitions of these terms? Does anyone think the meaning of definitions in law is NOT important? Are the definitions there for a reason? Do most people understand the terms "wages", "employee", or "trade or business" are statutorily defined terms that connote Federal Activity resulting in "income?"

Let's look at what a Legislative Draftsman had to say about it. This doesn't sound like "Cherry picking" to me. This sounds like some pretty broad, and all encompassing language:

"The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax."

F. Morse Hubbard, Treasury Department legislative draftsman.

House Congressional Record March 27th 1943, page 2580

This is actually one of the men responsible for writing the Current Tax Payment Act of 1943. Hey "taxguy," is F. Morse Hubbard going to be an "inmate" too? He wrote the code! I think he knows what he is talking about!

Now, I have provided multiple sources of information for discussion in an attempt to enlighten and help people. It is my sincere intent to reveal the truth as I know it from my career. I am getting anger, mocking, scoffing, and pooh-poohing from the peanut gallery.

For those of you who are CPAs or legal professionals, I am asking you to join in a thoughtful and constructive discussion over this matter.

For those of you reading, the lack of credible rebuttal from the other side should be very telling. The "they call them inmates" comment is ridiculous. Believe me, I am very much in the know as to why people become "inmates" in criminal tax indictments.

Have any of you heard of Saul of Tarsus? He was the most vile and brutal persecutor of Christians in the Bible. But one day, he saw the Light, and the Truth was revealed to him. At that instant, he was transformed, he could not live the lie anymore. He changed course . . . 180 degrees to be precise. Saul of Tarsus went on to become the Apostle Paul. Arguably the greatest spreader of the Truth in the history of the world.

Now, I am NOT the Apostle Paul, nor do I rank anywhere in his league. But my story is very similar.

Do you know who I am?

Edited December 8, 2009 by darkstar

[lookingforloot]

[darkstar]

lookingforloot,

You are absolutely correct about Pete Hendrickson. He was recently convicted, again. There is certainly a very good reason for that which I am absolutely 100% certain you know NOTHING about. I on the other hand can tell you exactly why he was convicted. He was convicted for the same reason every other "patriot type" is convicted: They are convicted for having the right idea but the wrong execution!

I also know specifically THE technicality he was convicted on. But what is really sad, is he was correct enough in his presentation, but the problem was the jury was very easily swayed by Judge Rosen's "instructions." When two of the jurors asked to read the definitions for themselves, they were dismissed. Why were they dismissed? Rosen later stated that he did not want the jurors to "speculate as to the meaning of the terms 'employee', 'employer', and 'wages.'" Hmmmm. Sounds like maybe the jury (and Hendrickson) got a little too close to the truth for the DOJ's comfort. Hendrickson's case is on appeal. But he will likely lose. Which is sad for him because he is looking at 30 years (literally). But lookinforloot, I would advise you to also Google Gerald Rosen and read up a little about him. Maybe you can ascertain why the former judge "recused" himself and Rosen was inserted in his place.

I simply provided the link in my previous post because it is rich with statutory references and case citations. It does a pretty nice job of presenting some basic concepts behind the nature and legality of the tax. Unfortunately, Cracking the Code and Pete Hendrickson are affiliated with the site. I will say, Cracking the Code is the single best PUBLISHED work I have read on the topic, but Hendrickson misses some major points which is precisely why we finally got him.

Again, don't shoot the messenger. Whether it be Schiff, Rose, Sherry Peel-Jackson, Joe Bannister, or Hendrickson, they all have the right idea but the wrong execution. I can tell you that nobody gets it more wrong than Bannister and Peel-Jackson. Bannister worked in IRS/CID, and Peel-Jackson was an auditor. What does that tell you? Does that lend any credibility to the banter I keep hearing on this site which goes like this: "Get in touch with you local tax professional" Please!!!

No, I am asking you to judge the material on your own -- to read, reason, and think. The truth of the matter is there for those who wish to see it.

Folks, our country is in major trouble. The government has been hijacked by a corporate oligarchy with heavy ties to the IMF and Federal Reserve. Please understand why the Federal Income Tax is so closely guarded. It's because without it, the dollar will collapse sooner that it is already destined to do. The Federal Income Tax is used to pay interest to the lenders of the Federal government. They do not pay for things that taxes are designed to pay for. They are interest ONLY payments. No principle is ever paid. The tax pays interest to the bankers, and is a purge mechanism to keep citizens prosperity and buying power down. Why? This keeps inflation in check. But the jig is up, and the scheme is coming down. You can learn the truth now or later. It doesn't really matter, because the truth will not be suppressed forever. I'm here to tell you there are MANY, MANY people within the DOJ and the IRS who know precisely how this scam works. There is an awakening, and I'm ashamed to say I learned this truth very late in the game. But I'm here to share it with those who would like to know it.

Edited December 8, 2009 by darkstar

[fullpint]

Darkstar your Saul of Tarsus examples is intriguing. I'm assuming you work(ed) for the IRS for quite a while. You know the scare tactics involved and the ability to lock one away for a very long time over this stuff. In fact I was just watching "A Bug's Life" with my 3 year old, the grasshoppers use similar scare tactics to keep the ants working for them.

Anyhow, my question is the same one you keep asking. Who are you?

[sos]

What about the subject in common here? Using your acute definitions, any gains in monies realized from the exchange of USD for NID and then NID back to USD, is neither income nor capital gains as I am hearing. Regardless of my intent in the exchange of USD for NID, it does not fall under an activity or an event of my doing that produced the gains. I am merely the beneficiary. Also, I do not believe that the IRS recognizes gains & losses from the exchange of currency as capital investments when the currency is physically held. They would if it were traded on the Forex.

Enlighten me further.

[darkstar]

Dazzleu,

Thank you for the kind words. I can tell by your questions that you are thinking all of the appropriate things. Unfortunately, the government has you locked up in a cage that you can't possibly begin to comprehend. There are ways "legally" around all of this. But what you have to realize is that it is your own people who are holding you prisoner. Take for example some of the rebuttals I have received for presenting the truth. The most damaging people in your lives are bank tellers, customer service reps where you invest, the passport agency, the DMV, and most of all, your friends, family and other people who, although well-intentioned, have completely no idea how the Federal Income Tax works. I could write you pages and pages with regard to your questions, but I will briefly provide you answers to each so that you have at least a general idea.

Regarding:

1) Every bank can open an account for you w/o a SSN legally, so long as declare your proper legal status of "nonresident alien." You do know that as a Citizen of a Union state, you are "alien" to Federal Territory don't you? And as someone not residing in Federal Territory, you are "nonresident." However, a "US person," who is a citizen or resident of the "United States" MUST provide a SSN, this due to the USA PATRIOT ACT and its specific implementing regulation 31 CFR 103.28. Please understand, the term "United States" does NOT mean the 50 Union states in Title 26 or Title 8, it means the Territory over which the United States Government is sovereign. As you know, you are sovereign in your particular Union state. The government does not want you to know this. Try convincing the dolt at the bank that you are NOT a "US person." That's what I mean about them being your biggest enemy. "My people perish for lack of knowledge." Hosea 4:6

2) See above.

3) In my opinion, your property is best kept safe outside of the United States of America denominated in Hong Kong Dollars or Chinese Yuan or in private, constitutional money such as gold or silver. There are ways to do this, but they are very labor intensive. Again, the government has built a prison for the people. Most just don't recognize yet that they are in one. If you "wire" money, FinCEN is going to know.

4) Yes, always! This is the biggest detriment to our freedom and sovereign legal status by far. SS is a Federal "Insurance" contract offer -- it is Federal Property like you said. This is how the Feds exercise extraterritorial jurisdiction into states of the Union when that jurisdiction would not otherwise exist. Tax indictments are actually against the SSN, and not the flesh and blood human being. Why? Because the SSN is the object over which the Feds have a vested interest. These prosecutions are brought in "rem," not in "personam." And the SSN is the "res," or the object that is actually the subject of the indictment. You just act as someone who is surety for any activities you engage in with their property. You act as an "officer" in essence for the Federal Government. It's very, very damaging.

5) I really don't believe the RV is imminent, but I could be wrong. It will happen at some point though. I hope you recognize the reason for this RV. The Federal Government is using "the people" as their means of liquidating the biggest banks when the second round of failures come around. TARP elicited such an outrage, they will let the American people do the dirty work. It's all about getting cash into the bigger banks. Why do you think the big brand names are involved here? If you are enriched in the process, so be it. They have to introduce all of this cash back into the economy somehow. What do you think when 2500 millionaires are created in this country overnight? People better pay off debt and get out of the dollar as quickly as possible.

6) Like I said before, currency exchange is NOT taxable unless it is accomplished in the course of "trade or business" which is defined as public office. There is really not much to do. I've posed the question to the forum as to how they believe a 1099 is going to be issued. How will the bank even know when one received their dinar? Here's a clue: Why do you think there is a box on a 1099 at the top of the form labeled "corrected?" It's there for you to correct the amount to "zero" if that in fact is the correct amount. Since 1099s are used to report "income" in the course of a "trade or business," which is defined as "the performance of the functions of public office," then any amount you RV as a housewife and mother is NOT taxable. This is not something that should be done unless you know what you are doing, as the IRS loves to get people who have the right idea but the wrong execution.

7) CTRs are ONLY filled out in the course of a "trade or business." Read the instructions on the form if you don't believe me. Again, the bank telllers only do what they are told. They don't know the law. CTRs are also required on "domestic" transactions. "Domestic" means within the "United States." But you do not live in the "United States" as defined in Title 26. That is unless you live in Federal territory.

8) Of course they do. It's inviting you into a spider web. Everything the IRS and the government does is like a pair of "Chinese Handcuffs." Once you are in, you create legal presumptions about who you are, and most importantly, the ACTIVITIES in which you engage in the course of earning your "income."

9) It quite literally needs to be done with a brief case in increments less than $10,000. This keeps it legal. But again, if you have categorized yourself as a "US person," any foreign bank account information needs to be declared on a Schedule B. As a ward of the government, you have to snitch on yourself. DO NOT do anything illegal or even remotely questionable as a "US person!" They are NOT protected by the Constitution in many, many instances. Don't you ever wonder why people in Federal Courts say, "What about my rights?" I've heard it a million times! Very sad!!

10) I know that language sounds all-encompassing. Please remember, you MUST keep that language in its proper context. All of that language applies if those things were done IN THE COURSE OF A TAXABLE ACTIVITY --namely, a "trade or business." Remember when Johnny's mother told him to PICK UP ALL THE TOYS? It sounds all-encompassing, but it must be kept in its proper context. This misunderstanding is exploited like no other in the application of the Federal Income Tax.

11) Yeah, but you have to be very careful. For example, did you know that "self employment" is a statutorily defined term. If you don't know this, and you admit to it, you admit to a taxable liability. This is how they got Al Capone. They asked Big Al a simple question about his "income" or his "compensation." When he did NOT deny that he made these things, he by default admitted that he did! This is how we get people for tax evasion. It's very, very insidious!!! Victims are blind-sided and they don't even know how it happened.

12) I've written enough material for 1000s of books, but no, I'm not published. Yes, I do know what I'm talking about.

13) I work in government? I'll leave it at that.

14) "Services" is a narrowly defined statutory term which connotes Federal Activity. It is defined in the Classification Act of 1923. I do not perform "services" for anyone except the Federal Government (aka the "United States"). To assist people for pay in this area is a very quick way to get in trouble. Even knowing what I know. I will help you for free however by sharing the truth. As sovereign Americans however, we really need to fight this thing ourselves in an individual capacity. It's challenging I know, but you are on the right track.

In the future, do me a favor and post your questions on the public forum. I am getting a ton of private questions. It would really save a lot of time and help a lot more people by posting this information for all to read. After all, it is my goal to not help people save money on their "taxes" per se, but to expose people to the truth, as we have all been lied to, and scammed beyond belief. It's a "system" that will not go down easily. Only when there is critical mass on the part of the American people, and we are all united in our knowledge and purpose.

Unfortunately madam, too many people are interested only in money, and NOT the truth or freedom. Christ was mocked, scoffed, spit on, and ultimately crucified by the very people he came to save.

[Dazzleu]

Dear Darkstar,

Thank you so much for your time and effort. You are amazing with your vast knowledge. I am trying to expand my own through you. Thanks for wanting to take our questions and help us everyday people. I am very pleased that you took me seriously. I have and always will be a law abiding non resident alien. I realize with your information that I am very much behind the eight ball. I feel like the main character of the Matrix, do I take the blue pill or the red pill? I get unhooked and realize the ugly truth. Will I be the enemy of the US government or State? Lol

1. In your humble opinion b/c of the technicality,

[waverunn1]

Dude...u sound like a Tax lawyer...u have more quotes of reference to law here than Carter does liver pills...If u don't know what u r talking about..u have a lot of people dazzled with the BS....Rock on!!!!

[tiramisu]

I look forward to Darkstar's answers to all these questions. Should be very enlightening.

[DeenarDick]

I have a few questions The Brushaber(sp) case and the 16th amendment. Tile or USC 4 Section 72. Or title 26 sec. 83

Thanks

[theviking]

It seems that you have bought into one of the many bogus tax evasion schemes that are floating around. Good luck!! Your next vacation could easily be all expenses paid by the taxpayers at the nearest federal facility.

Income tax is levied on "All income, from whatever source derived, unless specifically excluded" not just from a "trade or business".

AND Income has been defined by the Supreme Court as gain or profit. Yes there is a case and No - I won't find it for you. And who does the Income tax apply to - It's in the tax code and it isn't what you think it is - about 4-5 tax codes ago, they had it spelled out in one place which was not conducive for tax collecting and they later took one sentence here and another there and disbursed it out so nobody could find it unless you read the whole thing looking for it (somebody did). They are not allowed to delete words at will and therefore used this scheme.

[PuffsPlus]

http://blogs.abcnews.com/politicalpunch/2009/12/white-house-mixed-message-on-capital-gains-tax.html

link to article from ABC news that suggests Washington may eliminate capital gains taxes for a year

" White House released their statement of support, they also released a separate statement, focused on job creation, touting the Recovery Act

[steve]

I'd be interested ONLY if the investment returns are excluded from AMT income.

[talion1011]

In response to darkstar's ideas that investment in IQD is not taxable, and in response to those who wish to label the investment an "exchange of currency" so, it's not taxable:

--------------------

The general rule with regard to the U.S. tax treatment of gains or losses from exchanging U.S. currency for non U.S. currency (and back) is that the gain or loss on the currency exchange will now be taxed the same as the underlying transaction. The Taxpayer's Relief Act of 1997 included a provision [Act Section 1104(a)] that included some changes, which are included in the following explanation.

Where currency gains or losses are incurred in connection with the purchase of an investment, the gain or loss on the currency change on realization (usually from selling) is a capital gain or loss and is included as part of the total capital gain or loss on the investment.

Currency gains of $200 or less that arise from personal transactions (not for investment or business) are not taxable, but any personal currency losses are not deductible. A personal transaction includes any gain or loss arising from travel even if the travel is business related. Any currency gains in excess of $200 per transaction (per trip or per purchase) are treated as a capital gain. Losses on currency exchanges for business travel also appear to be non-deductible.

The primary source of information on the tax treatment of currency gains or losses is IRC Section 988.

So whether you choose to declare the profits of the IQD as an investment or as a personal transaction of currency exchange, you will still be taxed (unless you made less than $200 from it.. in which case, I feel bad for you )

The link is here: http://www.maximadvisors.com/knowledge-library/international-tax-planning/US-Taxation-Foreign-Currency-Gains-Losses

Edited December 9, 2009 by talion1011

[Dazzleu]

Darkstar,

really appreciated your time the other day!! Hoping you'll respond to my research. Lol

recently obama has been saying something about waving capital gains in small business. If that is the case, would it be easier to transfer iqd as a an item asset into a small business? Then when you cash in, under the small business, the small business would have capital gain assets that would not be charged? However, i see this as a negative thing b/c you wouldn't own anything. Of course during my research of links that were provided me, we don't own anything anyway. In the end we lose and it is hard to implement the other b/c of the verbage you constantly have to use. I.e. Employee/employer, zero wages, american non resident alein. It is almost to the point like you said, we are caged in the government system. The only thing left is to play their game or get screwed out of hard earned assets. Your thoughts would be welcomed

[Dazzleu]

I really enjoy this subject b/c i know how important capital gains affects us in the end. Really appreciate all that have continued to help all of us. Thanks

[hymark1]

This is very interesting.

[hymark1]

This is very interesting to see this subject progress.

[explodingbee]

I will say, Cracking the Code is the single best PUBLISHED work I have read on the topic, but Hendrickson misses some major points which is precisely why we finally got him.

Hi Darkstar,

You wrote the following about Pete Hendrickson:

"I will say, Cracking the Code is the single best PUBLISHED work I have read on the topic, but Hendrickson misses some major points which is precisely why we finally got him."

I have ordered Cracking The Code but have not yet received it. I would like to know what are the "major points" that he misses.

Also, are we liable for Capital Gains tax (as opposed to income tax) if we are not doing anything federally connected?

Thanks in advance,

Explodingbee

Edited August 13, 2011 by explodingbee