Thread: Canadian Tax Laws

Originally Posted by Gloribee

I posted this earlier for Canadians, but will repost so you can print and have available for your accountants.

Most accountants have little to no experience with currency traders, so you will need this Information which I recieved from Revenue Canada, and not a web site or another persons Interpetation. This is REVENUE CANADA talking, a real person.

Under Canadian tax laws we are subject to taxes under Regulation P4037, Section 17, paragraph 12-15. This directly relates to currency traders and tax Implications.

In basic English, its as follows: (Example only) You take your 1 million from selling your Dinars, divide by two. No tax on first $500,000 or 50%. From the second $500,000 Minus your Investment money, say $1000.00. then minus $200.00. The remainder you pay tax on based on your yearly tax rate.

The $200.00 is the exemption allowed for say, you were on holidays and came back with leftover cash. Value jumps and you make a tidy some of say $300.00 over the cost of what you paid for it.

By law, that extra $100.00 must be claimed. Would most claim this small amount? Doubtful, but it is still the law.

As well you have 364 days, before claiming your windfall. This will give you the time to top up RRSP's, and any other legal financial hiding spot.

Remember, pay your taxes and move on, let the other guy/gal look over there shoulder the rest of thier lives.

I am not an accountant, nor a financial advisor, just someone who spent way to many hours talking with Revenue Canada.

Now hit the print button, in a couple days were all rich.

Clarification on a couple of points. By the way I am an Canadian accountant.
The taxable capital gain is 50 % of the net gain. This is arrived at by taking your net proceeds (after deducting any bank fees for cashing them in) and subtracting your total cost of purchase (what you paid plus any fees at the time of purvhase). The cost must be subtracted from the total gain, not the 50%.

Also, the 200.00 exemption you are referring to would only apply if you had traveled to Iraq to purchase them. It would not apply if you purchased them here.

Your suggestion of topping up your RRSP is an excellent idea. Also, don't forget that if you are married you should split the gain and report 1/2 on each return. If it is a sizeable gain this will help keep as much as possible out of the top rate.

Another suggestion is that if you have adult children that you are planning on sharing your new wealth with, it would be a good idea to give them some dinars and let them cash them in themselves. Assets can be transferred from parents to children at cost. This would put the gain portion of the dinars they cash in on their returns and again catch as much of the lower rates as possible.

We are almost at the end of the year, so depending on how much you would be cashing in, you may want to check the effect of cashing in 1/2 in 2006 and holding the rest till January and push that portion of the gain into 2007, which is another tax year. If you have a relatively small amount it probably won't make much difference, but if you are talking amounts over $1 million then it probably would make a sizeable difference.

Originally Posted by seanscott

I live in cow town. I purchased my dinars on the internet about 6 months ago.
Does anyone from western Canada know where Dinars are being traded IN
Canada? I have spoken to 5 banks here in Calgary and they more or less laughed at me at the mention of Dinars. I am curious about actually selling them once an R.V. hits. Are there any other legalities for Canadians you might be aware of?

All things being equal our tax codes on this INVESTMENT sound pretty good compared to I.R.S. tax codes. I am quite interested in learning all I can about this investment from a Canadian stand point since most info here and the other place is U.S. based.

Calgary is a pretty good place to live. After that in my opinion I would live in the B.C. interior of the west coast. You never really hear all that much about my area in the bigger picture, but a lot of people must agree with me as the population of Calgary grew from 650000 to over a million in 6 short years.

Thank you so much for any info you might have.

a greatful Canadian

seanscott

I bought my dinars at Scotiabank and I presume they will be exchanging when it hits the regular forex markets.

Also, I read in one of the news articles last week that the Royal Bank is one of the banks that is going to be working with Iraq in the near future.

As long as it will be listed on the regular forex markets, you should be able to exchange it at any bank here in Canada. I do believe that there will probably be a procedure for verifying the notes before the cash will hit your account, but that is normal for any foreign currency when large amounts are involved.

Someone DOES likes to live up here LOL, Lots of fresh air, Not a lot of crime & the girls are prettier hahaha

Originally Posted by Cdn Scrooge

I bought my dinars at Scotiabank and I presume they will be exchanging when it hits the regular forex markets.

Also, I read in one of the news articles last week that the Royal Bank is one of the banks that is going to be working with Iraq in the near future.

As long as it will be listed on the regular forex markets, you should be able to exchange it at any bank here in Canada. I do believe that there will probably be a procedure for verifying the notes before the cash will hit your account, but that is normal for any foreign currency when large amounts are involved.

My son & I picked up some more this past week & he asked at the bank how much they were BUYING the D for, they replied $600 on 1,150000. We just paid $ 997.20 Interesting hummm?

Nino,
Thanks about the PM.

Here in Canada ..... THE only Bank to buy dinars from is the Bank of Nova Scotia.

Hey ... I promised to open an account there AFTER the dinars peg.

WOW! .... what personal service I've never received before to another Bank I use.
But the Credit Union I use also has super customer service!
Ahill

Originally Posted by Cdn Scrooge

Clarification on a couple of points. By the way I am an Canadian accountant.
The taxable capital gain is 50 % of the net gain. This is arrived at by taking your net proceeds (after deducting any bank fees for cashing them in) and subtracting your total cost of purchase (what you paid plus any fees at the time of purvhase). The cost must be subtracted from the total gain, not the 50%.

Also, the 200.00 exemption you are referring to would only apply if you had traveled to Iraq to purchase them. It would not apply if you purchased them here.

Your suggestion of topping up your RRSP is an excellent idea. Also, don't forget that if you are married you should split the gain and report 1/2 on each return. If it is a sizeable gain this will help keep as much as possible out of the top rate.

Another suggestion is that if you have adult children that you are planning on sharing your new wealth with, it would be a good idea to give them some dinars and let them cash them in themselves. Assets can be transferred from parents to children at cost. This would put the gain portion of the dinars they cash in on their returns and again catch as much of the lower rates as possible.

We are almost at the end of the year, so depending on how much you would be cashing in, you may want to check the effect of cashing in 1/2 in 2006 and holding the rest till January and push that portion of the gain into 2007, which is another tax year. If you have a relatively small amount it probably won't make much difference, but if you are talking amounts over $1 million then it probably would make a sizeable difference.

Thanks for clarifying. This was how it was explained to me, but not being an accountant, I may have thought I totally understood. For the most part I guess I had it right, just in a slightly different order.

This is pretty much why I started the thread, to Inform as many people as possible, so they can keep the majority of there new found wealth.

I will again repeat, pay the taxman, grief should not be apart of our new lifestyles.

The very same est. have told me no in various ways. ALL downtown branches.
I expected this however, and was just getting a second opinion from you, as this is a UNUSUAL investment in range and scope. In my opinion, bankers are not business people so it may be difficult for them to see this, OR they are on
GAG order except with the high and mighties. I've heard Starbucks got 20 some no's before their 1st business loan so bankers are not always the best to seek direction from hence the various responses regarding the Dinar.
I have been laughed at, ridiculed, and questioned. My Dads broker with a Major trading house needed to be educated on the Dinar and then thought it was not a good choice for him. My dad agrees with me, and he is already quite comfortable finacially.

I am guessing that there are no Canadian banks SELLING the Dinar at this time. Is this correct in your findings? Thank you for your help

seanscott

Hey fellow Canadians,

Just wanted to say a quick thanks for this very usefull information. I actually started a thread about canadian taxes a few months ago but I think it just got bumped to the bottom of the page LOL. Thanks for this new thread though.

I bought my first batch of dinars almost six months ago from Scotiabank here in Ottawa and have since gone back just a few more times ( i'm a dinarholic!)

I am 26 years old and unfortunately know NOTHING about taxes, capital gains and all that other fun stuff.

CDN Scrooge, I was just wondering if you would be able to give us an example of how our dinars would be taxed for people like me who are 'tax dumb' ? Let's say for example someone has $1 Million Iraqi Dinars. From this example, can you please give us a list of how we would declare this etc. I would like to know how much of that $1 Million will be taxed all the way down to the end result , that is if you don't mind?

Thanks very much from a fellow Canuck!

Cheers all,

Rob

I was told by a currency rep at the DOWNTOWN ScotiaBank branch that "they do not touch that stuff". Her words.

This was on Thursday around 1:00 pm. After being on hold for 20 min.

Interesting.....

Seanscott

I was told by a currency rep at the DOWNTOWN ScotiaBank branch that "they do not touch that stuff". Her words.

This was on Thursday around 1:00 pm. After being on hold for 20 min.

Interesting.....

Seanscott

Hey Seanscott, You have to make sure that the Scotiabank you go to deals in Foreign Exchanges because some of the branches are just smaller branches that don't deal with foreign transactions. You need to visit a main branch that does all that stuff and you have to go there in PERSON not on the phone. Find the right branch then go there and tell them you want to purchase Foreign Currency. They will ask you which currency and you simply tell them Iraqi Dinar. They have a special book for the type of currencies that are not bought/sold very often. They will then ask you how much in CANADIAN dollars you want to purchase and they make a phone call and will come back with the exchange rate and how much you'd be getting. They do charge an $8 fee for the delivery. All of my transactions have taken no more than two days then you just go back to the bank and pick up your dinars! Easy as that my friend!

Cheers all,

Rob