Thread: "Taxes", Anything Related To It In Here

This is very interesting stuff, Mike. Keep it coming.

Please keep us posted on this Investment Club idea. We would love to be part of it. It sounds great.

Blessings,

a-team

Thank you Jetsa1 and Mike... for this valuable information... being it has to be acknowledged as a "commodity" at time of exchange I really want to thank you because being in the US and not knowing this would really make a difference with our taxes...
like.. "sorry.. too late ..can't change it... more money please"..

When I was investigating entities to use for Pips.. there was so much info. that it got confusing.. onshore vs. offshore.. LLC vs Corps and trusts..
Jetsa1 being you are a professional and hold abit of dinar... may I ask
what you suggest? I finally went with Bill Leighton and formed a LLC.. he
says it is effective for asset protection but no tax break benefits.. he's not
familar with whats going on with the dinar so can't offer too much directon.


We'll planning on visiting a tax attorney once it pegs and we can afford one but til then is there anything you can suggest that we should be considering?

Thank you in advance... and anyone is welcome to share their suggestion...
I appreciate those of you who are informative, open minded and thoughtful and eager to share your info. with those those of us who are less informed.. but peddling as fast as we can..

Libby

Originally Posted by Jetsa1

Copied and pasted...

Correct U.S. Taxation on Dinar

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I have been a tax accountant for 29 years and also a financial planner. I own a substantial amount of Iraqi Dinar. Here is how it will be taxed the the IRS. This investment is not tax as regular capital gains are taxed. Foreign Currency is considered a "commodity" by the IRS and is taxed thusly: 60% is taxed at long term capital gain rates of 15%. The other 40% is taxed at ordinary income tax rates. This is all spelled out in Section 988 of the IRS Tax Code.
Combined the rates total 23%.
If you had one million Dinar and they were valued at one million dollars. You exchanged them in for the dollars and the amount you owe Uncle Sam is $230,000. You keep the $730,000 of that million dollars.

But, in order to do this, you must make an election at the time you exchange it and fill out the paperwork. Places that exchange currency know how to handle this. Go to Manchesterfx.com to see how it is explained there. If you don't make this election, then you'll be taxed at the highest current rate of 35%.

The one big advantage of this being classified as a "commodity" is that there is no specified holding period, as there is with long term capital gains. You can hold it one day, one week, one month, etc and it's still taxed at the 23%. If you exchange in a very small amount, then that tax rate would be lower, based on your ordinary tax rate.

Hope this clears up all the tax quesitons on our fortunes to be.

Hi-ya Jetsa

I found where you copied this post from and "taxmama" posted a follow-up so I thought I'd copy it in here...

"I have re-checked the taxability of the Dinar and find I was incorrect when I counted it as a commodity. The person who referenced that for currency futures contracts was correct. The Dinar will be taxed as a capital gain to all of us.
15% tax for holding it over 12 months.
35% (or less) for holding it under 12 months, depending on the amount exchanged.
I do apologize for the mis-statement. There are several view on this, but this morning I called Manchester FX who trades currencies daily worldwide, and in the U.S., hard currency is indeed a capital gain. "

I still say consult a local tax expert in your area...but it was nice for the time it 'worked'! lol!

Thank you very much Tiffany for the follow up as I totally missed it. Very bad on my part for not backtracking info and I do apologize.

Edit (or added to): There is no evading the tax man and IMO we shouldnt try. Find an investment counselor asap and get their opinion as to what to do with a vast sum of profit dumped in your lap. It wouldnt hurt to start seeking an advisor now because when the time comes, you dont want emotions in control and emotions are going to run rampant, if you know what I mean=P

After the initial rush is over (Heh that can be taken a couple of different ways /wink), I would be very interested in an investment club of sorts. Always good to be in the company of people you share something in common with.

Originally Posted by danny51

You need to get another opinion...my very experienced ex-IRS employee accountant says Capital Gain all the way!!! WOOHOO!!

hehehe...let it peg...let it peg...let it peg!!

Originally Posted by danny51

hehehe...let it peg...let it peg...let it peg!!

Smarty-Pants!

lol!

I still don't see how one would have to "prove" how long they had had their dinars...what if you have no receipts and "can't remember" exactly where you bought 'em...I mean...it's been so long, and there's been a certain amount of mental deterioration due to all the pre-peg parties...Sheesh!

Originally Posted by whatever

I still don't see how one would have to "prove" how long they had had their dinars...what if you have no receipts and "can't remember" exactly where you bought 'em...I mean...it's been so long, and there's been a certain amount of mental deterioration due to all the pre-peg parties...Sheesh!

Yes, it would definitley be interesting to see how they deal with this. I do have some receipts, but some of my dinar was given to me, how would I claim that?

Originally Posted by whatever

I still don't see how one would have to "prove" how long they had had their dinars...what if you have no receipts and "can't remember" exactly where you bought 'em...I mean...it's been so long, and there's been a certain amount of mental deterioration due to all the pre-peg parties...Sheesh!

I'm "thinking" (and I use that term very loosely right now! ) that if you don't have a receipt or billing statement it would automatically be considered as short term capital gains...the IRS doesn't really care...you know what I'm saying?

MY thoughts are...

Say you purchased 1 million dinars in Oct '05 and another 1 million in April '06...you have the packing slip/receipt for your October order, so you could technically exchange 1 million (or less) anytime from Oct 06 to April 07 and only be liable for the long term capital gains tax...even though you haven't held the dinars for one year.

You have a receipt that states that you have purchased 1 Million dinars on THIS SPECIFIC date...but the IRS doesn't know WHICH SPECIFIC dinars are ON the receipt! (But yes, any that you would exchange BEFORE the 1 year anniversary of your EARLIEST receipt would be subject to the higher tax.)

You may have to read this more that once...I think I confused myself...but it does make sense! lol!

Tiff

Originally Posted by choochie

Yes, it would definitley be interesting to see how they deal with this. I do have some receipts, but some of my dinar was given to me, how would I claim that?

YES!!! Given as a "Gift"! Hmmmm! I wonder if they would automatically just take the highest amount they can....

Awesome question Choochie! I hope someone knows the answer!