Tax advantage - never convert Dinar to $ post RV

[MC Dig]

Hello Everyone, I had this thought the other day and thought I would share it to see what people thought. Say I had $10 million Dinar, and it rv's 1 to 1. So instead of cashing in, I find a way to get my dinars to AL Warka or some other bank that is willing to keep the account in Dinar. From there I can buy CD's or other investments in Dinar. Say then every year I earn 10% interest (1 million dollars) which I can then wire back to an account in the US and use to live on. The interest would I suppose be taxed as income, but the principle and original gain ($10,000 to $10 million) would never be taxed. Technically that profit from the RV would never be realized because it would not be converted to dollars. The trick would be getting that $10 million dinar over to Iraq, perhaps Al Warka will open a branc in NYC, as I think the Kuwait national bank has a branch there. What do people think about this.

[one black cayman]

if you want your cash dinar in an Iraqi bank...you ought to get it there while the value is so low. Post RV you will have a hard time getting it out without breaking some laws.

The last thing you want to do is get caught trying to leave the country with all that dough unreported.

This forum is full of stories about people who have FedEx'd cah to Warka without one in which the principle was lost. Do it in 500K pkgs and let us know how it went.

[EBJNYC]

Hello Everyone, I had this thought the other day and thought I would share it to see what people thought. Say I had $10 million Dinar, and it rv's 1 to 1. So instead of cashing in, I find a way to get my dinars to AL Warka or some other bank that is willing to keep the account in Dinar. From there I can buy CD's or other investments in Dinar. Say then every year I earn 10% interest (1 million dollars) which I can then wire back to an account in the US and use to live on. The interest would I suppose be taxed as income, but the principle and original gain ($10,000 to $10 million) would never be taxed. Technically that profit from the RV would never be realized because it would not be converted to dollars. The trick would be getting that $10 million dinar over to Iraq, perhaps Al Warka will open a branc in NYC, as I think the Kuwait national bank has a branch there. What do people think about this.

Tax MINIMIZATION is one thing. Tax EVASION is another. The banking and tax cartel work hand-and-hand GLOBALLY these days. They are NOT pulling punches ANYMORE. Be SURE of your strategy.

[RotaryRevn]

all great ideas

[dinsun]

Now lets say if all of your dinars are in small notes 50-250-500-1k. I would thinking of not paying my taxes is by selling them on e-bay after the r/v.:cash:

[MC Dig]

Tax MINIMIZATION is one thing. Tax EVASION is another. The banking and tax cartel work hand-and-hand GLOBALLY these days. They are NOT pulling punches ANYMORE. Be SURE of your strategy.


I plan on paying all my taxes, my point is that if one converts dinars to dollars after an rv of 1 -1, then there will be a gain of $999,000 for every $1,000 invested. That gain would be taxable, best case senario would be a long term capital gains of 15%. However if you never make the change from dinar to dollar then that gain is never realized, so no taxes would be due. Just rake in the interest and pay your taxes on that.

Thoughts anyone

[orfannkyl]

let's hope it gets high enough where this is an issue

[RotaryRevn]

I plan on paying all my taxes, my point is that if one converts dinars to dollars after an rv of 1 -1, then there will be a gain of $999,000 for every $1,000 invested. That gain would be taxable, best case senario would be a long term capital gains of 15%. However if you never make the change from dinar to dollar then that gain is never realized, so no taxes would be due. Just rake in the interest and pay your taxes on that.

Thoughts anyone

Obama has already publicly stated that his plan calls for 20% rate on Long Term gains and he is going to raise the top income tax rate to 39% :lipssealed:

[EBJNYC]

I plan on paying all my taxes, my point is that if one converts dinars to dollars after an rv of 1 -1, then there will be a gain of $999,000 for every $1,000 invested. That gain would be taxable, best case senario would be a long term capital gains of 15%. However if you never make the change from dinar to dollar then that gain is never realized, so no taxes would be due. Just rake in the interest and pay your taxes on that.

Thoughts anyone

Interesting strategy. Paying taxes on WARKA INTEREST ONLY; rather than paying taxes on REALIZED usd conversion. I get it. :handshake:

[Thaiville]

MC DIG,

You can always tranfer your funds to another currency in another account. Either way if you leave it in a IRaqi bank you run the risk of loosing that money if the bank or Iraqi economy tanks.

You see others on this thread caution you to Fed ex 500k at a time and not all at once to insure if a package is lost the package didn't have all your millions.

Post RV: Diversify and pay your taxes to Uncle Obama or else you might see Bar and I don't mean gold bars.

Thaiville,

*Disclaimer- Avoiding Taxes carries high risks that are higher risks than the odds of a RV at a 3.20 exchange rate.

[Hue Mi]

MC DIG,

You can always tranfer your funds to another currency in another account. Either way if you leave it in a IRaqi bank you run the risk of loosing that money if the bank or Iraqi economy tanks.

You see others on this thread caution you to Fed ex 500k at a time and not all at once to insure if a package is lost the package didn't have all your millions.

Post RV: Diversify and pay your taxes to Uncle Obama or else you might see Bar and I don't mean gold bars.

Thaiville,

*Disclaimer- Avoiding Taxes carries high risks that are higher risks than the odds of a RV at a 3.20 exchange rate.


Are you saying that
"You can always tranfer your funds to another currency in another account."

is a non-taxable event?

[jefrog]

Interesting strategy. Paying taxes on WARKA INTEREST ONLY; rather than paying taxes on REALIZED usd conversion. I get it. :handshake:

i really have to spend time with a really good tax attorney.

If I hold my money in an IQD account and I decide to wire some money to one of my USD accounts, why do I have to pay any kind of capital gain tax? I am simply moving money from one count to another of a different currency.

[Thaiville]

Are you saying that
"You can always tranfer your funds to another currency in another account."

is a non-taxable event?


HUE MI,

SLOW DOWN COWBOY. LOL!!

Nope never said a non-taxable event cause Idont know of anyway of avoiding taxes legally, equally I do not think its a good idea to avoid paying taxes.

I'am saying you can transfer your dinar accounts to other accounts in other currencys meaning Iraqi Dinar (when it is a recognized as world traded Dinar currency, where currently its not a world recognized open market traded currency) will be able to get conversion to other currencys other than US Currency.

So if you don't want to stay in a Iraqi bank account and you don't want to stay in a U.S. bank account post RV you can always move it to another country in another currency since IF there is a post RV I'm sure it means it will be a openly traded currency across the world and converting it to another currency would be legal.

Somebody here said you need to have a CPA who is very knowledgable with these type of investments since it can get complex.

In summary I never wanted to make anyone think what I posted was intent to avoid paying taxes by transferring your funds POST RV and I apologize if that was the resulting misunderstanding.

Thaville


Again I will disclaim: I do not think avoiding paying taxes is a easy or even a good idea. Its easier to pay off the good ole USA in your taxes and then do whatever you want after that legally in order to stay away from the monkey house.

[lglwzrd]

once again i need to comment on all of the jail house lawyer strategies......hahahahahaha!!!!!!!!!:giggle::gigg le::giggle::giggle::giggle:

[Thaiville]

once again i need to comment on all of the jail house lawyer strategies......hahahahahaha!!!!!!!!!:giggle::gigg le::giggle::giggle::giggle:

Its the Monkey House!

[Stuck@Cedar]

Hello Everyone, I had this thought the other day and thought I would share it to see what people thought. Say I had $10 million Dinar, and it rv's 1 to 1. So instead of cashing in, I find a way to get my dinars to AL Warka or some other bank that is willing to keep the account in Dinar. From there I can buy CD's or other investments in Dinar. Say then every year I earn 10% interest (1 million dollars) which I can then wire back to an account in the US and use to live on. The interest would I suppose be taxed as income, but the principle and original gain ($10,000 to $10 million) would never be taxed. Technically that profit from the RV would never be realized because it would not be converted to dollars. The trick would be getting that $10 million dinar over to Iraq, perhaps Al Warka will open a branc in NYC, as I think the Kuwait national bank has a branch there. What do people think about this.
Exactly what I have been saying for months. Unless you cash it in for USD (and possibly other forms of currency) you don't owe any taxes on the initial money since you haven't realized any gain.


Obama has already publicly stated that his plan calls for 20% rate on Long Term gains and he is going to raise the top income tax rate to 39% :lipssealed:
You say that as though you expect it to come to pass. Remember, Obama is the man of CHANGE and his position will probably CHANGE one way or another before a bill makes its way through congress to CHANGE the tax rates.:giggle:


...*Disclaimer- Avoiding Taxes carries high risks that are higher risks than the odds of a RV at a 3.20 exchange rate.


Thaiville, I think you need to verify your terminology. Avoiding taxes is the American way... unless you listen to Biden, who says paying taxes is your patriotic duty. You're thinking of evading taxes which is illegal... unless, it seems, you happen to be a Democrat politician.:cheeky-smiley-025:

[Stuck@Cedar]

i really have to spend time with a really good tax attorney.

If I hold my money in an IQD account and I decide to wire some money to one of my USD accounts, why do I have to pay any kind of capital gain tax? I am simply moving money from one count to another of a different currency.

If you purchased your Dinar (or any other currency) at a low rate and then exchange it back to USD when it gets to a higher rate, you owe taxes on the gains if you have more than $200.00 in gains. If you don't convert it from Dinar back to USD you haven't realized a gain.

[ARE WE THERE YET ?]

Hello Everyone, I had this thought the other day and thought I would share it to see what people thought. Say I had $10 million Dinar, and it rv's 1 to 1. So instead of cashing in, I find a way to get my dinars to AL Warka or some other bank that is willing to keep the account in Dinar. From there I can buy CD's or other investments in Dinar. Say then every year I earn 10% interest (1 million dollars) which I can then wire back to an account in the US and use to live on. The interest would I suppose be taxed as income, but the principle and original gain ($10,000 to $10 million) would never be taxed. Technically that profit from the RV would never be realized because it would not be converted to dollars. The trick would be getting that $10 million dinar over to Iraq, perhaps Al Warka will open a branc in NYC, as I think the Kuwait national bank has a branch there. What do people think about this.

Lots of banks have different foreign currency accounts. I'm sure that the likes of Citibank would eventually have a dinar account. My brother currently moves money between his EURO, GBP and US accounts and makes a few quid when the exchange rates are right.....

AWTY?

[Thaiville]

Thaiville, I think you need to verify your terminology. Avoiding taxes is the American way... unless you listen to Biden, who says paying taxes is your patriotic duty. You're thinking of evading taxes which is illegal... unless, it seems, you happen to be a Democrat politician.:cheeky-smiley-025:

Cedar,

Thanx for the critique teach. Democrat I'am not.

Evading, invading or avoiding to me is all the same just as long as when i'm in court I can say its my policy to always pay my taxes rightfully.

In truth I hate posting on IIF cause of the back lash and thrashing that goes on here. I think its cause the Dinar is making people bitter and course so when it or if it RVs maybe people won't be so overly picky of other peoples posts.

Granted some need some critque work like mine did (obviously) but sometimes it gets really rediculous, rude violent and out of control.

This is why recently I prefer to lurk on this site.

Well back to lurk mode or until I post again. LOL

Thaiville a.k.a. Lurk

[oil4$]

Hello Everyone, I had this thought the other day and thought I would share it to see what people thought. Say I had $10 million Dinar, and it rv's 1 to 1. So instead of cashing in, I find a way to get my dinars to AL Warka or some other bank that is willing to keep the account in Dinar. From there I can buy CD's or other investments in Dinar. Say then every year I earn 10% interest (1 million dollars) which I can then wire back to an account in the US and use to live on. The interest would I suppose be taxed as income, but the principle and original gain ($10,000 to $10 million) would never be taxed. Technically that profit from the RV would never be realized because it would not be converted to dollars. The trick would be getting that $10 million dinar over to Iraq, perhaps Al Warka will open a branc in NYC, as I think the Kuwait national bank has a branch there. What do people think about this.

I have a better idea than that---on the 10 million you currently own, just buy another say 4 million more before rv and you can keep your 10 mil free and clear. After all, don't you want to help pay off the debt Obama and company are creating every day that goes by?

[Money4Nothin']

Let's look at this another way. Say you take a trip down to Mexico. When you get there you convert $3000.00 into pesos.That's about 45,000 pesos. When you decide to come back to the states you just drive or whatever over the border and go home. The next day you go to the bank to exchange your pesos back to dollars. Let's say you have 30,000 pesos left. That will convert to about 2,000 dollars. You're telling me that I will have to pay taxes on that money when I exchange it. I don't think so.

[Money4Nothin']

You know, just forget it. I'm going to my taxman and getting this straightened out once and for all. Tell you what happens when I get back.

[R-MAN]

Exactly what I have been saying for months. Unless you cash it in for USD (and possibly other forms of currency) you don't owe any taxes on the initial money since you haven't realized any gain.


You say that as though you expect it to come to pass. Remember, Obama is the man of CHANGE and his position will probably CHANGE one way or another before a bill makes its way through congress to CHANGE the tax rates.:giggle:


Thaiville, I think you need to verify your terminology. Avoiding taxes is the American way... unless you listen to Biden, who says paying taxes is your patriotic duty. You're thinking of evading taxes which is illegal... unless, it seems, you happen to be a Democrat politician.:cheeky-smiley-025:

actually..it is not a LAW to pay taxes...it is a personal preference......BUT the (irs) will impose a penalty on you (fine or jail) if you dont pay taxes..... thus forceing you to pay....which if you ask me sounds like extortion..

[ret2003]

Good afternoon to everybody and glad to be on board in this forum. I'm looking forward to communicating with all members to learn, listen and provide my best opinion on issue.

Please let me get started..My first question is how do I protect my large investment of the Dinars that is currently in a safe place?

Your thoughts please...

[john1]

ret2003,
Dig and search for that info here on the IIF. You can enter a search for a topic and push enter and there you go. You will find more than you bargained for. Be ready with a big pot of coffee. These guys on here have answered just about any question you need except for when the RV is going to be. The answer to that $64,000 is yet to be answered.
Have FUN and ENJOY.
:clapping:

[cajey]

Guess what is considered legal tender and can be used to fund your estate and only pay taxes on the face value. Good old US issued $50 Gold.

[Luko1234]

What if you funnel the money,,Iraq,,,panama city,,,Mexico,,,USA,,???if you wire over ten grand into a us account,,the is the end or just ask for a letter of credit from warka and you can open an account wherever you like.

[Luko1234]

How about a no name or address warka credit card,,that way you are never detected??or just go live in a different country??

[Stuck@Cedar]

Let's look at this another way. Say you take a trip down to Mexico. When you get there you convert $3000.00 into pesos.That's about 45,000 pesos. When you decide to come back to the states you just drive or whatever over the border and go home. The next day you go to the bank to exchange your pesos back to dollars. Let's say you have 30,000 pesos left. That will convert to about 2,000 dollars. You're telling me that I will have to pay taxes on that money when I exchange it. I don't think so.

No, that's not what we are saying. You're not reading the posts.

"If you purchased your Dinar (or any other currency) at a low rate and then exchange it back to USD when it gets to a higher rate, you owe taxes on the gains if you have more than $200.00 in gains. If you don't convert it from Dinar back to USD you haven't realized a gain."

If you went down to Mexico and converted $3000 into Pesos at 15 Pesos to $1 and when you returned it was the same rate, you didn't see a gain... just the return of your money.

On the other hand, let's try this scenario. You exchange that $3000 for 45,000 Pesos in the morning when you cross the border and get to where you are going later that night. Between the time you bought your Pesos and the time you got to your destination the exchange rate doubles. Now you have $6000 worth of Pesos since the rate is now 7.5 Peso to $1. You talk to the manager of the resort you are staying at and are told the prices have been dropped by 50% to adjust for the change in the exchange rate. (The resort wants to stay competitive with other foreign resorts for American tourists.) Now the stay that was going to be 11,250 Peso ($750 at the old rate) is now 5625 Peso ($750 at the new rate). You go out on a shopping spree with some of your new found wealth at the resort's shops, where the prices have also been adjusted, and spend another 5625 Pesos. When you return to the US, you exchange your remaining 30,000 Pesos (at 7.5 Pesos to $1) and get back $4000. All in all, you exchanged $3000, spent the equivalent of $2000 on your vacation at the resort (including the shopping), and got back $4000 upon your return to the US. In essence you came out ahead $3000, but you are only taxed on the gain you "realized", which is the $2000 extra you got from the amount you cashed back in. That $2000 should be listed on your taxes as a capitol gain.

I hope that clears it up.

[EBJNYC]

Good afternoon to everybody and glad to be on board in this forum. I'm looking forward to communicating with all members to learn, listen and provide my best opinion on issue.

Please let me get started..My first question is how do I protect my large investment of the Dinars that is currently in a safe place?

Your thoughts please...

If your dinars are in a "safe place" --- why worry ???? :rofl::rofl::rofl:

[Pirate]

i have try to contact this bank a few times and they dont respond, does any one have info in what can be happening?

[Panther]

Hello Everyone, I had this thought the other day and thought I would share it to see what people thought. Say I had $10 million Dinar, and it rv's 1 to 1. So instead of cashing in, I find a way to get my dinars to AL Warka or some other bank that is willing to keep the account in Dinar. Technically that profit from the RV would never be realized because it would not be converted to dollars.

Quick question, are you sure this will work? Or, are you speculating that the IRS thinks the same way.

BTW, I agree that this is a really good method, however, I have not been able to confirm that depositing NID into a Dinar denominated account is not a taxable transaction. Guessing wrong on this transaction is too expensive of a mistake. Can anyone give a link or cite the IRS regs supporting this tax strategy?

[Stuck@Cedar]

Quick question, are you sure this will work? Or, are you speculating that the IRS thinks the same way.

BTW, I agree that this is a really good method, however, I have not been able to confirm that depositing NID into a Dinar denominated account is not a taxable transaction. Guessing wrong on this transaction is too expensive of a mistake. Can anyone give a link or cite the IRS regs supporting this tax strategy?

The http://www.irs.gov/pub/irs-pdf/p525.pdf (http://www.irs.gov/pub/irs-pdf/p525.pdf), the 2007 issue of Taxable and Nontaxable Income, on page 30:

Foreign currency transactions. If you have a gain on a personal foreign currency transaction because of changes in exchange rates, you do not have to include that gain in your income unless it is more than $200. If the gain is more than $200, report it as a capital gain.

The IRS doesn't consider anyone to have a gain until they "realize" the gain. You don't realize the gain unless you initially receive money or until you exchange it into USD for more USD than you were already taxed for. If you are a US citizen working here for the Iraqi government and are paid in Dinar, you would have to pay taxes on the US equivalent of what you were paid, at the conversion rate on the day you were paid (at that point you realized a gain). If you use USD to purchase Dinar you do not have any gain. If you put your Dinar (or USD) into a Warka account, you would not pay any tax, since you have not realized another gain. If they pay you interest, you would have to pay taxes on the US equivalent of what you were paid, at the conversion rate on the day you were paid (at that point you realized a gain). If it then did an RV, you wouldn't have to pay any tax unless and until you converted it into USD, and the taxable amount would be what you received minus the amount you already paid tax on (which is the the gain that you would realize at that point).

[Sweetgirl1956]

The IRS told me that you have to claim a gain or lose at the end of each year that you are holding the dinar. You base this on the current exchange rate. But, there are so many different rates, LOL. I will do it when I sell. THen I will pay my taxes and go to the dinar party. I currently have 5 mil and seriously thinking about buying more. Well I have bought 5, I only have 4 because I paid for 1 mil NID on Feb 9th and still have not received them from GID Associates.

[Tgtsv5]

Hello all,
Try to think positive. Iraq WILL prosper eventually and with that our investment will pay off. It may take a while, but hey, that just means you have that much more time to collect more dinar. That way you can save the " protection money " to pay the government so your actual investment goes to you the way it was planned. I have toyed with the idea of keeping mine in another country and then avoiding US tax; but the fact remains if you live here and use it, you still end up paying tax. And, the government might start asking questions of where its coming from. Then theres the idea of possibly loosing your money if the foreign currency goes soar... I thnk I'll pay my taxes.... Too much headache.. I'll keep buying the protection dinar for uncle sam...

[drfir]

lets see if this rv's first, but to me i would rather pay my taxes then having to pay for protection while i am living in the big house, i dont think my wife would like it when i introduced my new boyfriend to her:makeup::doh:

[Fat Albert]

I would love to pay taxes on my Dinar after an RV. After taxes I could live comfortably for the rest of my life. Paying taxes is the least of my worries and concerns.
My main concern is that this thing will never pay off!!

[Thaiville]

lets see if this rv's first, but to me i would rather pay my taxes then having to pay for protection while i am living in the big house, i dont think my wife would like it when i introduced my new boyfriend to her:makeup::doh:


drfir,

Oh my Obama that was funny!

Thaiville

[Panther]

The IRS doesn't consider anyone to have a gain until they "realize" the gain. You don't realize the gain unless you initially receive money or until you exchange it into USD for more USD than you were already taxed for. If you are a US citizen working here for the Iraqi government and are paid in Dinar, you would have to pay taxes on the US equivalent of what you were paid, at the conversion rate on the day you were paid (at that point you realized a gain). If you use USD to purchase Dinar you do not have any gain. If you put your Dinar (or USD) into a Warka account, you would not pay any tax, since you have not realized another gain. If they pay you interest, you would have to pay taxes on the US equivalent of what you were paid, at the conversion rate on the day you were paid (at that point you realized a gain). If it then did an RV, you wouldn't have to pay any tax unless and until you converted it into USD, and the taxable amount would be what you received minus the amount you already paid tax on (which is the the gain that you would realize at that point).

Its that " REALIZE" part that might get you. For instance, if I earn interest income on a saving account, but leave the interest in the account, I still have to pay tax on the income even though its still in the bank. Other examples might include, interest on multiyear CDs - no interest paid to me until the CD matures, but you earn taxable interest each year.

As I see it, the defining difference will likely be if the bank account is dominated in NID. That would be the only way I can hope not to be taxed on the income until I withdraw from the account.

Again - I agree that this is an excellent plan, however, I have not been able to confirm that depositing NID into a Dinar denominated account is not a taxable transaction. Guessing wrong on this transaction is too expensive of a mistake.

Spent too much time dealing with the IRS to think I can out guess them and come out ahead.

[4aprofit]

I think what everyone seems to be trying to decipher here'...is actually when the TAX is due'...Whether Cash Dinars in hand here or over there, invested in the ISX, invested in CD's in Iraq, Savings Acct's. in Iraq, etc...(Is the only time that any tax is due...only when we actually cash in, in any of the 3 or 4 different ways, or make profits???..Into US Dollars...with a realized profitable exchange differentiation???)...Just wondering if taxes would be due on any realized profits in Warka, in ISX, CD's, Etc...that have went up in value over there, but have not been changed over to US Dollars, or brought into the US yet???...I would assume that naturally, any dinars not cashed in yet here in the US, would not be taxable until exchanged, whereby only then would you realize a profit?..Just for notes..if they are actually going after those with Swiss Accounts...then most any profitable venture overseas, would have to be reported as some type of income I would think..I am sure we will need some good consultation from a good Tax Atty. and/or CPA before it's over...one who is fluent in International Commerce!

[redvette]

I would love to pay taxes on my Dinar after an RV. After taxes I could live comfortably for the rest of my life. Paying taxes is the least of my worries and concerns.
My main concern is that this thing will never pay off!!
I totally agree:cool-too: When is the question, or is it soon again:wink:

[Stuck@Cedar]

Its that " REALIZE" part that might get you. For instance, if I earn interest income on a saving account, but leave the interest in the account, I still have to pay tax on the income even though its still in the bank. Other examples might include, interest on multiyear CDs - no interest paid to me until the CD matures, but you earn taxable interest each year.

As I see it, the defining difference will likely be if the bank account is dominated in NID. That would be the only way I can hope not to be taxed on the income until I withdraw from the account.

Again - I agree that this is an excellent plan, however, I have not been able to confirm that depositing NID into a Dinar denominated account is not a taxable transaction. Guessing wrong on this transaction is too expensive of a mistake.

Spent too much time dealing with the IRS to think I can out guess them and come out ahead.

The only time you would realize a gain would be a during an event that should fall into one of the following categories (unless I missed one)

1) You were working for a company that paid you in Dinar (taxed as regular income using the exchange rate on the day you were paid)

2) You have money in a bank account or CD and you had interest credited to the balance of your account (taxed as regular income using the exchange rate on the day it was credited to your account)

3) You received a dividend from a stock in the form of either cash in your account or more stock (taxed as the same as dividends in the US, as regular income or as a "qualified dividend" depending on how long you owned the stock, using the exchange rate and market price on the day it was credited to your account, the dividend date)

4) You sell a stock (taxed the same as in the US, the amount you sell it for minus the amount of your basis, which would be either the amount you paid for it or the value you paid tax on if it was received as a dividend)

5) You have Dinar you originally purchased using USD or received in category 1, 2 or 3 and are now exchanging into USD, you would pay tax on the difference between the amount you receive in USD and either the amount you originally paid in USD or the amount you paid tax on if it was from category 1, 2 or 3. (taxed as capital gains)


I think what everyone seems to be trying to decipher here'...is actually when the TAX is due'...Whether Cash Dinars in hand here or over there, invested in the ISX, invested in CD's in Iraq, Savings Acct's. in Iraq, etc...(Is the only time that any tax is due...only when we actually cash in, in any of the 3 or 4 different ways, or make profits???..Into US Dollars...with a realized profitable exchange differentiation???)...Just wondering if taxes would be due on any realized profits in Warka, in ISX, CD's, Etc...that have went up in value over there, but have not been changed over to US Dollars, or brought into the US yet???...I would assume that naturally, any dinars not cashed in yet here in the US, would not be taxable until exchanged, whereby only then would you realize a profit?..Just for notes..if they are actually going after those with Swiss Accounts...then most any profitable venture overseas, would have to be reported as some type of income I would think..I am sure we will need some good consultation from a good Tax Atty. and/or CPA before it's over...one who is fluent in International Commerce!

The taxes for any of the above categories should be due in the tax year that they occur, which is when they are realized.

When you deposit money into or withdraw money from a bank account you do not realize any gain solely due to the deposit or withdrawal. If you cash in your Dinars at the same time, that would be covered above in category 5.

If your account value appreciates in value solely due to the variation in exchange rate, you have not realized any gain. If you withdraw Dinar from your account and spend it AS DINAR, you have not realized a gain. If the dinar RVed to 1:1 and you withdrew 10,000 Dinar (that cost you less than $9), bought a nice Persian carpet and brought it back to the US, you wouldn't have to pay income tax on any gain... but you would have to pay import duties on a $10,000 carpet. (Unless you can convince the customs agent that it only cost you $9. :giggle:)

The one thing I am not sure of is if you convert it into another foreign currency. Let's say I pulled out 10,000 Dinar after a 1:1 conversion (no tax liability yet) and went to Europe. If I spent all the money as Dinar I wouldn't owe any tax, but what If I converted it into Euros? It would depend on exactly how the rules are written. My best example of why I don't think you should owe would be in stocks. If I purchased $10,000 worth of a $10 stock (1000 shares) and it appreciated to $50/share I do not own any money yet. If my company is bought out with a 1:1 stock swap by a company with stock that is currently going for $75/share, I still have not realized a gain (no tax due yet)... but I now have a different item and (unlike exchanging for Euros) my holdings just appreciated to $75,000 in value.

[syzygy-iif]

Allow me to jump in with this comment I originally posted in '
Anyone formed a LLC to protect your dinar investment? '

" I am not an accountant or attorney, but I have attended enough classes to know that there are about 18 million lines of code in the U.S. tax laws and they were put there for good reason - most importantly donations to lawmakers. The right attorney and accountant should be able to make some of those lines work how you need them to within the letter of the law."

A US Tax Attorney who has written on the subject relayed a story that a dot'commer who was a millionaire on paper before the dot com crash owed the IRS 5 million USD in taxes. As far as I know the dot'commer is a US citizen.
When the bubble burst and he was worth zipo, zilch, nada, nothing......the wonderful United States Internal Revenue Service still wanted that 5 million even though he had not cashed in and realized a profit........So what did our super hero Tax Attorney do ?
He and an exceptionally well versed CPA wrote to the IRS declaring that the first Accountant was unqualified to represent the dot'commer and then they created a package of more than 50 pages citing various IRS code and defending their position. The dot'commer did not pay a penny.

Whether you use http://www.irs.gov/pub/irs-pdf/f90221.pdf - or - whether you use http://www.irs.gov/pub/irs-pdf/p525.pdf page 30 you are both right.......
It all comes down to WHY you are citing which line of IRS code and HOW WELL you defend your position.

I watched an Attorney successfully defend three positions and at the end the question was posed to the Attorney, "Now who is right ?" The Attorney said "WHO IS PAYING ME ?" Attorneys (TAX or otherwise) are paid to defend whoever pays them. Get some proper counsel and you won't have to worry about getting poked in the pokey.

[syzygy-iif]

I think what everyone seems to be trying to decipher here'...is actually when the TAX is due'...Whether Cash Dinars in hand here or over there, invested in the ISX, invested in CD's in Iraq, Savings Acct's. in Iraq, etc...(Is the only time that any tax is due...only when we actually cash in, in any of the 3 or 4 different ways, or make profits???..Into US Dollars...with a realized profitable exchange differentiation???)...Just wondering if taxes would be due on any realized profits in Warka, in ISX, CD's, Etc...that have went up in value over there, but have not been changed over to US Dollars, or brought into the US yet???...I would assume that naturally, any dinars not cashed in yet here in the US, would not be taxable until exchanged, whereby only then would you realize a profit?..Just for notes..if they are actually going after those with Swiss Accounts...then most any profitable venture overseas, would have to be reported as some type of income I would think..I am sure we will need some good consultation from a good Tax Atty. and/or CPA before it's over...one who is fluent in International Commerce!

No offense, but you answered your own question. The right Attorney/CPA team will be able to speak the IRS jargon in the proper way to defend you and the intent of your position and business. A discount Attorney and CPA will more than likely yield less than desirable results.

[Panther]

Here is an interesting case to consider.

http://news.yahoo.com/s/ap/20090309/ap_en_ot/castroneves_tax_charges

MIAMI – To this day, race car driver and "Dancing With the Stars" winner Helio Castroneves hasn't seen a single dime of $5 million in licensing money he was promised under a 1999 contract with Penske Racing. It's either been parked at Penske or is still idling in a Dutch investment account.

But the Internal Revenue Service says Castroneves owes U.S. income taxes on the money anyway, contending the 33-year-old driver can't avoid tax by simply refusing cash to which he's entitled. A complex concept known as "constructive receipt" is at the heart of the prosecution's case against the two-time Indianapolis 500 winner.

Testimony resumes Tuesday in the tax trial of Castroneves, his business-manager sister Katiucia Castroneves — both originally from Sao Paulo, Brazil — and his lawyer Alan Miller of Birmingham, Mich. All are charged in a seven-count federal indictment with conspiracy and tax evasion from 1999 to 2004.

The three defendants are facing more than six years behind bars if convicted. Trial is expected to last about a month.

Experts say jurors will have to decide if the Castroneves deal was real or contrived to make it appear he didn't have control of his Penske money.

"What the government is saying is, if you are entitled to some cash, and you leave it in your mother's bank account, it's still your cash," said Chas Roy-Chowdrey, a tax expert with the global industry group Association of Chartered Certified Accountants.

[Stuck@Cedar]

Here is an interesting case to consider.

http://news.yahoo.com/s/ap/20090309/ap_en_ot/castroneves_tax_charges

MIAMI – To this day, race car driver and "Dancing With the Stars" winner Helio Castroneves hasn't seen a single dime of $5 million in licensing money he was promised under a 1999 contract with Penske Racing. It's either been parked at Penske or is still idling in a Dutch investment account.

But the Internal Revenue Service says Castroneves owes U.S. income taxes on the money anyway, contending the 33-year-old driver can't avoid tax by simply refusing cash to which he's entitled. A complex concept known as "constructive receipt" is at the heart of the prosecution's case against the two-time Indianapolis 500 winner.

Testimony resumes Tuesday in the tax trial of Castroneves, his business-manager sister Katiucia Castroneves — both originally from Sao Paulo, Brazil — and his lawyer Alan Miller of Birmingham, Mich. All are charged in a seven-count federal indictment with conspiracy and tax evasion from 1999 to 2004.

The three defendants are facing more than six years behind bars if convicted. Trial is expected to last about a month.

Experts say jurors will have to decide if the Castroneves deal was real or contrived to make it appear he didn't have control of his Penske money.

"What the government is saying is, if you are entitled to some cash, and you leave it in your mother's bank account, it's still your cash," said Chas Roy-Chowdrey, a tax expert with the global industry group Association of Chartered Certified Accountants.

Isn't he being tapped for the Secretary of Transportation post?:yelrotflmao: