Proof of purchase

[RogerTHughes]

What constitutes proof of purchase for IRS to determine capital gains tax? All my dinar was purchased in Kuwait from bank at airport and money changers downtown. Is it enough to show I traveled to Kuwait and had the opportunity to purchase? I have no receipts, just flight log of travel to Kuwait.

[mnatividad]

What constitutes proof of purchase for IRS to determine capital gains tax? All my dinar was purchased in Kuwait from bank at airport and money changers downtown. Is it enough to show I traveled to Kuwait and had the opportunity to purchase? I have no receipts, just flight log of travel to Kuwait.

As someone who works in public accounting, my personal opinion is that the IRS will not ask for receipts. If a rv ever does happen (which hasn't been too promising lately) at say 1:1 and people all over the country are cashing in, the IRS isn't going to spend their time asking for receipts whether you are claiming a short term or long term gain.

What they will probably consider looking at will be the cost basis that you claim. In our case, if a 1:1 rv happens, our cost basis will be practically nothing (your proceeds on a million dinar will be a million dollars and your cost will be around $700). Therefore you are paying tax on practically the entire amount already. Now if you claim a long term capital gain with a cost basis of say $50,000 on $1,000,000 of proceeds, then that could be a red flag.

[oldskiier]

As someone who works in public accounting, my personal opinion is that the IRS will not ask for receipts. If a rv ever does happen (which hasn't been too promising lately) at say 1:1 and people all over the country are cashing in, the IRS isn't going to spend their time asking for receipts whether you are claiming a short term or long term gain.

What they will probably consider looking at will be the cost basis that you claim. In our case, if a 1:1 rv happens, our cost basis will be practically nothing (your proceeds on a million dinar will be a million dollars and your cost will be around $700). Therefore you are paying tax on practically the entire amount already. Now if you claim a long term capital gain with a cost basis of say $50,000 on $1,000,000 of proceeds, then that could be a red flag.

So you're saying when I go to cash my 8 million dinar in at lets say 1 : $1.42 ....thats $11,360,000.00 they wont ckeck if I claim all at long term capital ganis....thats a differance of ...15 % or 30 % .....you really think they are not going to check ?.....times that by 1/2 trillion Dinar here in the US ...I think they'll check :)

[mnatividad]

So you're saying when I go to cash my 8 million dinar in at lets say 1 : $1.42 ....thats $11,360,000.00 they wont ckeck if I claim all at long term capital ganis....thats a differance of ...15 % or 30 % .....you really think they are not going to check ?.....times that by 1/2 trillion Dinar here in the US ...I think they'll check :)

Not necessarily. In my experience, I've seen long term gains of astronomical amounts claimed on tax returns - far more than $11 million and I've never seen the IRS request proof of purchase as long as the transaction appeared reasonable. But at the same time, I wouldn't assume that the IRS wouldn't check. If that does happen and you can't provide proof, nothing extreme would happen to you (you won't go to jail or get trialed in court). You would just meet with the IRS and negotiate an agreement.

Believe me my friend, I hope this is a problem we will all encounter very very soon. Good luck to you.

[oldskiier]

Not necessarily. In my experience, I've seen long term gains of astronomical amounts claimed on tax returns - far more than $11 million and I've never seen the IRS request proof of purchase as long as the transaction appeared reasonable. But at the same time, I wouldn't assume that the IRS wouldn't check. If that does happen and you can't provide proof, nothing extreme would happen to you (you won't go to jail or get trialed in court). You would just meet with the IRS and negotiate an agreement.

Believe me my friend, I hope this is a problem we will all encounter very very soon. Good luck to you.

Yeah ! me too .....lol

[RogerTHughes]

Thanks for the clear and logial response. When RV happens in a big way I plan to appease the government and live out my life with the millions left.