Word to the wise on taxes

[Celmac]

I have heard alot of people mentioning trading in under $10,000 at a time to avoid taxes. I understand the idea but in the end it will cause you more headaches than it's worth. I work at a casino and I see this all the time.

What most people don't know is if you cut short of the 10 grand most institutions are required by law to fill out a SAR (Suspisious Activity Report) Form. This is our systems way of tipping off the IRS and law enforcement of possible money laundering. It is a 99% guarentee of a tax audit. Then you'll have to deal with all the legal problems that come with trying to evade taxes.

Like I said, this is what I know from the casino industry so I can't say it will be the same for banks and such but it would only make sense that it would be. Save yourself a big headache, pay the taxes and enjoy the rest of your new riches in peace. :)

[RET]

A friend of mine said the very exact same thing. I agree, save yourself the headache ... pay the taxes and enjoy what's left over.

[TxTech]

the fact that, lets say you do manage to get all of your money back to the states tax free, when you go to purchase a new car or home or anything of real value; that will also tip off the goverment to your activities...Better to pay now then later.

[nozlmn]

It really amazes me the amount of people who want to try to cheat on their taxes. Your tax money is what got us this oppurtunity in the first place. If you hadn't paid taxes our military would not have had the funds to go over there and kick Saddam out. Don't dishonor all of the brave U.S. soldiers and the countless brave Iraqis who have losed their lives because of Saddam's twisted leadership. Pay your taxes and quit trying to be greedy.

[RET]

Excellent point! I agree. Seems that some forget that if weren't for our men and women supporting the cause, we wouldn't be in the position we are in now. I for one am thankful and will pay the taxes (At times, I do grumble 'cause I have to pay so much, though :shhh: ).

It amazes me the time and effort people put into trying to work around the system (illegally). I'm tired of reading about this tax issue. Seriously, is it worth it? Is it worth the chance of getting caught? If your answer is "yes" then you're ... well ... stupid. Pay what you owe and live "happily ever after" on the rest.

GREED. The love of money is the root ... well, you've heard it before. :D

Off my soap box ... back to my little corner.

[bottlebush]

It really amazes me the amount of people who want to try to cheat on their taxes. Your tax money is what got us this oppurtunity in the first place. If you hadn't paid taxes our military would not have had the funds to go over there and kick Saddam out. Don't dishonor all of the brave U.S. soldiers and the countless brave Iraqis who have losed their lives because of Saddam's twisted leadership. Pay your taxes and quit trying to be greedy.Well O/K let them TRY to cheat.

[nozlmn]

Perfect picture, hey tax cheats are you seeing our point yet?

[RET]

:lmao: :lmao:

Sad thing is ... NO ... they probably are not. They're pretty determined people (nice word for HARD HEADED). :drunk:

[nozlmn]

letsdodinar, you go right ahead and "minimize" your tax burden, but you had better be very carefull about how you "minimze" your obligation. You'll be using your profits at the exclusive Iron Bar Hotel. :D

[RET]

It doesn't make you a cheat if you don't agree with paying the taxes. Shoot, there are several taxes that I think I shouldn't have to pay, but I pay them because "they" say I have to.

There MAY be ways of not having to pay as much ... not checked with my accountant. I doubt it when it comes to this particular matter, though. I could be wrong. It's the "loop holes" that a person looks for that are not on the up and up OR the person that flat out doesn't pay that makes one a cheat, in my opinion.

To each his own.

Probably gonna get bashed for this one. Shoulda stayed in my little corner. :lmao:

[Geoff]

Perfect picture, hey tax cheats are you seeing our point yet?

If you had any real understanding of how taxation actually works in this country, where your taxes actually go, and what the $$ is used for...you'd probably think quite differently.

[nozlmn]

I don't fill it out, my accountant does it. That way I'm not the only one in the audit hotseat. BTW, I ve never been audited but if our investment hits I wouldn't be surprised if some of us are. Hey letsdodinar, I'm just having some fun, its only natural too look for loopholes legal or shady. :huge:

[BrerRabbit]

I thought this might help explain.

http://www.fool.com/taxes/2003/taxes030613.htm

If you wait till 2008 to exchange there is no Federal tax!

[RET]

:lmao: Block of salt. :lmao:

[fishy7]

It really amazes me the amount of people who want to try to cheat on their taxes. Your tax money is what got us this oppurtunity in the first place. If you hadn't paid taxes our military would not have had the funds to go over there and kick Saddam out. Don't dishonor all of the brave U.S. soldiers and the countless brave Iraqis who have losed their lives because of Saddam's twisted leadership. Pay your taxes and quit trying to be greedy.
Hey muzlman, make up your mind. First you accuse everyone who asks questions regarding limiting their tax liability of being a tax cheat, then it's "just having fun"? BTW, your little self-righteous tirade above sounds very familiar to me. Sort of like a threatening PM I received a while back. You ever send a PM under the name of "interested"?

[fms]

:lmao: Block of salt. :lmao:

Since this is a thread about taxes, how about a H & R Block of Salt? :lmao: :lmao:

[TxTech]

I don't know why everyone is bashing Taxes. I've lived in Taxes my whole life...wait..damn dislexia!

[nozlmn]

Fishy, I was joking about the Iron Bar Hotel comment not my original comment about paying taxes. I still don't like all the talk about how to not paying taxes. I still think it is digraceful to the people who have died in Iraq. I did not send any email too you.

[RET]

:lmao: T-A-X-E-S ... however, I've heard TEXAS sorta pronounced this way many a time. Kinda like MISSOURI = MISERY :lmao:

Ya gonna comment on the "sign" in the other thread? :rolleye03 ... the Longhorn sign ... NOT the one Jerry posted (goof).

[TxTech]

RET, all I can say about that pic is W. know's where it's at!

[RET]

Yup ... Texas has a special place in my heart, too. ;)

[THANOS]

I thought this might help explain.

http://www.fool.com/taxes/2003/taxes030613.htm

If you wait till 2008 to exchange there is no Federal tax!


now thats good to know

[Dinaress]

read and proceed with caution--here ya go.
You Are In: USINFO > Topics > Trade and Economics






24 January 2005

Upcoming Miami Conference to Focus on Fighting Money Laundering
Several U.S. officials will attend Feb. 9-11 event



By Eric Green
Washington File Staff Writer



Washington -- A conference to help the world's financial industry fight money laundering will be held in Miami, Florida, February 9-11, 2005.

Organizers of the conference say it aims to educate financial institutions on compliance in today's regulatory environment, including complying with the provisions of the USA Patriot Act, and to help these institutions maintain "a competitive edge by utilizing modern technology and best practices."

The event will feature professionals in the legal, regulatory, and financial industries who will update conference attendees on new legislation and recommend practical compliance solutions. The conference is designed for money transmitters in the United States and abroad, financial regulators, compliance officers, private banking managers, trade finance managers, broker dealers, attorneys, and accountants.

Organizers for the conference include the Federation of Latin American Banks, which represents more than 700 banking and financial institutions from 19 countries throughout Central and South America, and the non-profit Florida International Bankers Association, which represents more than 70 U.S. and foreign banks from 18 countries. That association's executive director, Pat Roth, says that under the USA Patriot Act, "everyone in the financial industry is now subject to new laws and regulations, not just banks." Broker dealers, money transmitters, check cashiers, and other financial entities in the United States and Latin America "need to understand their responsibilities and obligations" under the Patriot Act, said Roth.

The USA Patriot Act, signed into law by President Bush in 2001, is designed to expand intelligence and law enforcement capability to identify and disrupt terrorist activities.

A number of participants from the U.S. government are scheduled to speak at the Miami event, including William Fox, director of the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN); Lester Joseph, acting chief of the U.S. Department of Justice's Asset Forfeiture and Money Laundering Section; and Herbert Biern, senior associate director of the Federal Reserve Board's Division of Supervision and Regulation. Other speakers include John O'Hara, senior investigative counsel for the U.S. Senate Committee on Banking, Housing, and Urban Affairs; and Carter McDowell, chief counsel for the U.S. House of Representatives' Committee on Financial Services.

The Treasury Department's FinCEN says money laundering involves criminals who disguise financial assets by converting them into seemingly legitimate income. FinCEN says money laundering can have "devastating social consequences." For instance, money laundering provides funds for drug dealers, terrorists, arms dealers, and other criminals to operate and expand their criminal enterprises. Left unchecked, money laundering can erode the integrity of national financial institutions, says FinCEN.

Organizers of the Miami conference say that for more than two decades, the financial industry has played an important role in the fight against money laundering. Originally asked to help in the war against illicit drugs and money laundering related to the illegal drug trade, the financial industry is now "doing its part to help prevent the use of the financial system to fund terrorism or other illicit activities," the organizers say.

Conference organizers add that both banking regulators and the financial industry have taken their additional responsibilities under the USA Patriot Act "very seriously," with banks making significant investments in sophisticated software and hiring additional staff, while the regulatory bodies have issued severe penalties in the form of "cease and desist orders" and monetary fines for banks and other financial entities that have not met the strict compliance guidelines under the USA Patriot Act.

More information about the Miami conference is available online at: http://www.antimoneylaundering-fiba.com/index.asp


(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)




http://usinfo.state.gov/xarchives/display.html?p=washfile-

[Beach]

Dinaress, linkie no workie.

[Dinaress]

FinCEN forms are one of those tax forms for capital gains. Looks like the US Patriot Act is going to be watching the money exchanges.

[Mo, Spanish Fort]

What if you made purchases - like for your shiny new car or summer home and find someone willing to be paid for it in Dinar? You're paying in dinar and they'd be cashing in for whatever the face value was that day. they wouldn't have made any capital gains so who if anyone would be taxed?

[Winchester-2]

The IRS looks specifically for this kind of activity. Its called a means test. They look at your reported income and compare that to your assets and life style to see if you are living well above your reported income.

If it looks suspicious, then they dig deeper, maybe they contact the guy who sold you the car and ask how you paid for it. The seller has no reason to protect you and probably won't risk a problem with the Feds, so the seller will tell them the truth, and BINGO, you have a problem.

Many tax cheaters who keep a low profile can get away with some hidden income, but the big dollars are almost impossible to hide.

Just hold it for more than one year so you pay the lower tax rate of 15%.

If you live in a state that has high taxes on income, consider moving to an income tax free state, Florida, Nevada are good choices. Just remember you have to be meet a residency test which consists of time in the state and a real residence (house or apartment) in the state, or else your old state can claim their share of your profits for a % of the year before you moved.

[cnbmis]

Regarding holding until 2008 (actually, in our case it would be at least 2009 or 2010 depending on when you have aquired your NID, but anyhoo) -- those are the so-called "super-long term" investments. Only problem there is I believe the drop in rate once you hit that term is supposed to sunset in 2008? Regardless of sunset or extension, any provisions regarding tax rates are going to depend on the political climate in the year or two preceding to really know what's going to be in place, especially that far in the future.

As for the CTR (Currency Transaction Report) & SAR (Suspicious Activity Report) and the wonderous act o' USA Patriot (which is an acronym, btw, for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism"), the former two have been in place for quite some time -- CTRs for at least 10 or 20 years and probably much longer. So, considering the long-established methods the gov has for watching things, along with the more recent "tools" (many of which are dangerous, imho :no: ) put in place, it really just is not worth the headache and over-the-shoulder-looking to try and escape losing a few bucks in taxes. There is so much to gain that the taxes are negligible in reality, and in some way I like to think those tax $$ will be distributed to those who are boots on ground as proper compensation for their sacrifices.

The best thing is to be in as early as possible, and to have the developments take place over a year or two, which will automagically force us into the "long term" cap gains vs. the more spendy type.

I'm hoping for an initial pop that will make cashing in a couple million worthwhile, and then a steady climb to where it makes sense to cash in further millions over time. That will make it plausible to invest in more traditional vehicles that will create a sustainable, stable, and less risky interest income to live off. :happy64:

Chris

[nozlmn]

That was good stuff Chris, my feelings exactly.

[Mo, Spanish Fort]

I can only speak for myself, but I don't think that anyone is exatly trying to be a tax cheater in here. We're inquiring on the rules/loop holes/laws involved in cashing in currency. Until I heard about this, I'd never even thought of currency trading as a way to make money. When I think of an investment, I think of stocks etc and I relate exchanging dinar into dollars the same way you would when you come back from a trip and exchange foreign currency back to dollars. This (hopefully) will be a much larger exchange and I'll be sure to have my forms already printed out and rdy when I drop by the bank to cash in.
I support our country, our rights and freedoms. I love our troops and all they do to protect us and believe they are the ones who deserve the million dollar salaries instead of the sports figures and movie stars. My son was in the Navy and worked at the Pentagon during 9/11. I am thankful he wasn't killed. However, I'm not going to pay extra in taxes anymore than anyone else would if there is a legal way around it. I'm going to deduct my mortgage interest and charitable contributions just like everyone else this year and not feel like I'm cheating the government for doing so.
I enjoy this forum, it has been very informative and interesting to read, and I want to thank everyone for the advise. Good, Bad, or Otherwise...

[cnbmis]

I'm with you Mo, and I'm still getting my head around the concept of exchanging cash as being a taxable event. There are valid things that exempt you from taxes, like mortgage interest, and I'm sure many of them at one time or another seemed like "evasive" maneuvers.

Hell, perhaps there will be some kind of special designation created when it comes to hard currency exchange versus trading on the forex. If there were enough people doing the Dinar dance, I'm sure we would see some kind of official statements regarding it. However, once a person goes and participates on the forex, I think that becomes quite clearly an "investing" activity.

Maybe we are still in a grey area? The reason I say this is when you look at the cap gains form (Schedule D), it is clearly oriented towards stocks. Also, in the instructions, it's a bit vague about what assets are. I saw coins mentioned, collectibles, cars, that kind of thing, but little mention of hard currency in a bundle sense. I think that's the primary point of consideration -- can hard currency, held for a period of time, be considered an asset that, through conversion and realization of profit, incurs tax liability?

You'd like to think that the IRS, with their millions of pages of code and publications, had a simple sentence or two that specifically addressed this situation. No, I take that back -- you'd like to think they just didn't have millions of pages of junk that addressed every possible situation under the sun, and rather a more simplified set of rules that required little interpretation.

Sheesh, I'm sounding like a waffler. Methinks I should just shut up for now, this is turning into a ramble. On Monday, I'm going to mull this over with my accountant and get his feelings on the matter. Maybe I can get him on board for buying some Dinar too. :)

[dinardreamer]

Cnbmis,
You brought up an outstanding point. Why would we be taxed in the first place? With all this huffying and puffying about taxes cheaters, has anyone thoroughly looked into this to see if we EVEN OWE TAXES???? For example, you go on a trip to Europe and exchange dollars for euros and spend a few weeks having fun. Upon returning to the U.S., you walk into Bank of America and exchange the remaining euros for dollars. For some reason, within the last two weeks the conversion rate changes and you end up with more money than you started with after cashing in. The only thing I've ever heard of is having to pay a conversion fee at the bank. I have never heard of having to fill out a short term or long term gains schedule at the end of the year and pay taxes on a currency rate difference.

I think we should research this or ask someone at the IRS because even though 15% isn't much, 0% is even better. I'm all for paying my taxes, IF they are due. If we don't owe anything, then that's all the better.

[dinardreamer]

Alright, I called up the IRS and after a bunch of phone transfers, I was handed over to a helpful individual. Now, this isn't a direct answer so I'll leave it up to others who have close contacts with accountants and such to find out the rest but here is what he sent me:

RIA Federal Tax Handbook
Page 808 Paragraphs 4684 and 4685

Paragraph 4684 - Foreign currency gains and losses: section 988 transactions.

"Foreign currency gain or loss attributable to a "Section 988 transaction" must generally be computed separately and be treated as interest income or expense, as the case may be. However, a taxpayer may elect to treat the foreign currency gain or loss attributable to certain of these transactions as capital gain or loss.

Recognition of foreign currency gain or loss requires a closed and completed transaction, such as the payment of a liability.

The source of these gains and losses is determined by reference to the residence of the taxpayer or QBU on whose books the relevant asset, liability, or item of income or expense is properly reflected.

A "section 988 transaction" is any of specified transactions if the amount the taxpayer is entitled to receive, or is required to pay, by reason of the transaction is either:. denominated in terms of a nonfunctional currency or 2 determined by reference to the value of one or more nonfunctional currencies.

Paragraph 4685 - Personal Transactions

The Code Sec. 988 rules apply to transactions entered into by an individual only to the extent the expenses properly allocable to them satisfy Code Sec. 162, Code Sec. 212(1) or Code Sec. 212(2). An individual who disposes of foreign currency in a personal transaction doesn't recognize gain by reason of flunctuations in exchange rates during the period the taxpayer held the currency, unless the gain exceeds $200."

So this brings up a few questions. Is our situation a section 988 transaction? The last line of paragraph 4685 says not to recognize the gain of currency exchange UNLESS it exceeds $200. In our case, we are waiting to cash out for the big money, so yes, it would definitely way beyond $200. Now that leaves us with two possibilities: income earned which would really suck or long term capital gain. I'm not enough of an expert to answer if it qualifies for one or the other so I think it would benefit us all if we found out, in advance, what we OWE, IF ANYTHING, and how we need to handle our affairs. It would put to rest this issue with tax cheaters. I personally defend anyone who wants to minimize the amount of taxes they owe as long as it's legal. The rich as well as the poor are looking to pay what they owe and nothing more. If you want to be generous and had your whole wad over to the IRS, feel free.

Anyone want to research this further and put this issue to rest once and for all? Do we owe, if so, how much?

[shrtkayke]

Taxes are used for good things...obviously there isnt anyone is this group pinching pennies or else you couldn't buy dinar....so stop that grumbling and think of it as a small price to pay for your lifelong wealth.... :rolleyes:

[Edmond]

Hell I lookforward to the day I can write a 6 figure check to the IRS.

That is proof that our dreams did come true.

Ed

[Dinaress]

I can go and do anything i want in America, i can have or not have any friends i want. I can buy anything i need. My family doesn't go hungry, I can sleep good at night knowing knowing my family in another state is safe, that i have no governing body that will cut off my head or hands, get shot at for voting for which candidate i want...........GOD BLESS AMERICA---i will glady pay. Freedom has a price tag and it doesn't bother me at all. Now when i cash in please give those military boys and girls a raise :happy64:

[Big Daddy Dinar]

I can go and do anything i want in America, i can have or not have any friends i want. I can buy anything i need. My family doesn't go hungry, I can sleep good at night knowing knowing my family in another state is safe, that i have no governing body that will cut off my head or hands, get shot at for voting for which candidate i want...........GOD BLESS AMERICA---i will glady pay. Freedom has a price tag and it doesn't bother me at all. Now when i cash in please give those military boys and girls a raise :happy64:


I don't mean to imply that anyone looking to pay the minimum required is somehow doing something wrong, but we DO have the right to decide how aggressive a position to take on taxes. I will NOT be pushing the envelope with an aggressive position to try to save a couple of bucks, and that's just the way I feel about it. I will gladly pay what is required. I won't pay extra, but I'm not going to scour the tax code for a way to get out of paying.

[bottlebush]

I don't mean to imply that anyone looking to pay the minimum required is somehow doing something wrong, but we DO have the right to decide how aggressive a position to take on taxes. I will NOT be pushing the envelope with an aggressive position to try to save a couple of bucks, and that's just the way I feel about it. I will gladly pay what is required. I won't pay extra, but I'm not going to scour the tax code for a way to get out of paying.
Ya'll gonna be rich YES???
Hire a competent CPA. He won't screw ya, cause he holds a legal license that he has to keep up to date.
I'm lucky there. My nephew is a VERY successful CPA :huge:

[David G]

If you have held your Dinar for over a year, does it qualify for capital gains tax instead of normal income? I would think it does since it was purchased with taxed money to begin with. It is the same as buying a stock..

[Okie]

By law you can't evade taxes without breaking the law. You can, however, reduce and minimize your taxes to the best of your ability.
My solution: Go to the country where you want to live and:

1. Hire one of the international accounting firms.

2. Give them full disclosure of what you have and your plans.

3. They will provide a plan that's legal.

4. Follow the plan and enjoy the money.

5. Quit looking over your shoulder for the IRS.

PS The accounting firm will save you more than their fee.

[DoctorDinar]

Please note I am not tax guru by any means.

In order to be liable for taxes you must first be able to declare a value. Currently the only bank that is using the Iraqi Dinar is the Central Bank of Iraq. Which of course includes all the banks in the country of Iraq. With this being said, until the Iraqi Dinar is accepted on the world markets it has no value outside the country of Iraq.

Once the International Monatary Fund lists the currency and the U.S. has a way of putting a value on the currency then you may indeed incur a tax liability. Right now if you took your Iraq Dinars to a bank in the U.S. and asked to put a value on the amount of currency you have they will most likely tell you it has no value.

Not to shock anyone with that information but currently the U.S. banks have no cost value ratios to work with to put a value on such currency. If the banks can not put a value on the currency how can you honestly put a value on the amount of tax liability you have in this situation.

Lets look at it from the perspective of a fine art investor. An art investor buys a piece of art in hopes to gain value over the course of the holding period. If the investor sells the piece of art above what he or she paid originally then they have incured a tax liability. This tax liability or "capital gain" should then be reported to the IRS if they want to keep everything honest. The reason why they had to pay capital gains on their fine art investment was because the artwork or item had a value added to it that was recognized internationally.

In the case of the Iraqi Dinar it can be considered as a fine piece of artwork but currently it has no international value. Once the Iraq Dinar starts trading then we will all fall under the tax law mentioned above.

I personally am currently looking at the ability to wire deposit it in a Swiss Bank Account. The laws of Swiss Banking are very strict on who they can disclose there customers information to outside the bank. There are two types of accounts one that is a account number only (Extremely secure) and one that has a number and a name (very secure). Both accounts are protected by the Swiss Banking Laws.

Attach a "Mastro Card" (European Master Card) to the account and you can travel the world using your credit card.

Not sure if the Swiss Bank account idea will work I am still working on getting the details.

Just a thought. :D

[Brojeffrey]

" The solution......

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

By law you can't evade taxes without breaking the law. You can, however, reduce and minimize your taxes to the best of your ability.
My solution: Go to the country where you want to live and:

1. Hire one of the international accounting firms.

2. Give them full disclosure of what you have and your plans.

3. They will provide a plan that's legal.

4. Follow the plan and enjoy the money.

5. Quit looking over your shoulder for the IRS.

PS The accounting firm will save you more than their fee."


This is the best advice that is posted on this thread.

The key to executing this plan is to complete objectives 1 thru 3 before cashing in 1 dinar, preferably before the dinar start to move significantly.

There are a number of countries that offer easy, legal vehicles for American citizens to minimize their tax burden. The only reason that more people, other than the wealthy, don't take advantage of them is that the tax minimization programs aren't worth the effort for the average working class folks.

Example of what can be done legally:

Scenario #1: Dinar goes up to $.11 and you decide to cash in your 10,000,000 dinar for USD's. You walk away from the money exchange with $1,000,000 USD. Yahoo... You, being an honest US citizen report this on your tax form as long term capital gains and pay the tax man $150,000. You decide that you need a house, boat, and living expenses for the year and take out $100,000 and invest the rest wisely and earn 10-15%. At the end of the year you have earned $80,000 in dividends, etc and since you don't have a whole lot of deductible expenses anymore you end up paying $20,000 in income taxes.

Total tax load for the first year is $120,000 and money left in the bank is $750,000 to live on, paying income or capital gains every year depending on your investment portfolio.

Scenarion #2: You exercise forethought an planning and take a trip down to Nassau in the Bahamas before the dinar moves and spend a day with one of the local business attornies setting up a limited trust (corporation). This takes a couple days and costs about $2,000 plus travel expenses. You sell your 10,000,000 dinar to this corporation of which you are chief operating office immediately at current market rate. Maybe you make a few bucks or maybe you loose either way not much profit and probably little or no US income tax to pay.

You watch the and the dinar goes to $.11. You direct the the corporate attorney to sell your company's dinar and invest the proceeds wisely. Your company now has $1,000,000 USD in various assets. You have incurred no tax liability yet because the company owns the assets not you and, by the way, did I mention that the Bahamas has no corporate income tax?

You decide that it would be a good investment for your company to purchase a nice house in an appreciating neighborhood and they do so. You are hired as caretaker of the properties for a minimal salary. You also decide that it would be a good investment to buy a sail boat or two and lease them through one of the many charter organizations in the Bahamas. When you are all done you still have $1,000,000 invested on the company books and have paid no income tax.

Since you are a company employee you need a salary, so your company pays you a salary that you can live on, but remember you don't need to pay house payment, electricity, etc. So you decide that you can live on $75,000 per year which you dutifully pay your $17,500 taxes. You as COO have to go and check on the company assets on a regular basis so you travel to the Bahamas for meeting with your attorneys and bankers (a company expense), book charters on your boats to see how the organization is treating company property and what kind of job they do etc. etc.

When the year is all done the dinar have been sold for $1,000,000 USD, you have control over a corporation with $1,000,000 in assets, you have paid $17,500 in income taxes and are living the lifestyle of the rich and famous (not really , but pretty good lifestyle). This program can be continued until you die if you invest wisely and don't overspend the corporate income thus leaving a nice inheritance for your kids.

Taxes paid $17,500, assets remaining $1,000,000 (don't go into depreciation and all that at this point)

Ever wonder how the rich and famous earn millions per year and pay next to zero taxes? See scenario #2.

So why doesn't the working man do this and reduce his taxes? It takes about a million dollars to get started. You can start for less but you have to invest in higher risk opportunities in order to generate the cash flow needed to live well.

Think about it, is this cheating the US government out of their rightful taxes? If it is there are a lot of corporations and wealthy individuals cheating the government while you are paying the bill.

[quotro]

You guys in the US hav it easy. We in the UK have to pay Capital Gains Tax of 40% .... what are you all crying about! I'm the one that should be crying. Booo Hooo. I need one big loop hole. Any Ideas? Maybe i move to the US!

Depressed.

[Mo, Spanish Fort]

40% tax huh? Wow! do you get a peck on the cheek or anything or just told to "bend over?" :drunk:

[tazish]

" The solution......

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

By law you can't evade taxes without breaking the law. You can, however, reduce and minimize your taxes to the best of your ability.
My solution: Go to the country where you want to live and:

1. Hire one of the international accounting firms.

2. Give them full disclosure of what you have and your plans.

3. They will provide a plan that's legal.

4. Follow the plan and enjoy the money.

5. Quit looking over your shoulder for the IRS.

PS The accounting firm will save you more than their fee."


This is the best advice that is posted on this thread.

The key to executing this plan is to complete objectives 1 thru 3 before cashing in 1 dinar, preferably before the dinar start to move significantly.

There are a number of countries that offer easy, legal vehicles for American citizens to minimize their tax burden. The only reason that more people, other than the wealthy, don't take advantage of them is that the tax minimization programs aren't worth the effort for the average working class folks.

Example of what can be done legally:

Scenario #1: Dinar goes up to $.11 and you decide to cash in your 10,000,000 dinar for USD's. You walk away from the money exchange with $1,000,000 USD. Yahoo... You, being an honest US citizen report this on your tax form as long term capital gains and pay the tax man $150,000. You decide that you need a house, boat, and living expenses for the year and take out $100,000 and invest the rest wisely and earn 10-15%. At the end of the year you have earned $80,000 in dividends, etc and since you don't have a whole lot of deductible expenses anymore you end up paying $20,000 in income taxes.

Total tax load for the first year is $120,000 and money left in the bank is $750,000 to live on, paying income or capital gains every year depending on your investment portfolio.

Scenarion #2: You exercise forethought an planning and take a trip down to Nassau in the Bahamas before the dinar moves and spend a day with one of the local business attornies setting up a limited trust (corporation). This takes a couple days and costs about $2,000 plus travel expenses. You sell your 10,000,000 dinar to this corporation of which you are chief operating office immediately at current market rate. Maybe you make a few bucks or maybe you loose either way not much profit and probably little or no US income tax to pay.

You watch the and the dinar goes to $.11. You direct the the corporate attorney to sell your company's dinar and invest the proceeds wisely. Your company now has $1,000,000 USD in various assets. You have incurred no tax liability yet because the company owns the assets not you and, by the way, did I mention that the Bahamas has no corporate income tax?

You decide that it would be a good investment for your company to purchase a nice house in an appreciating neighborhood and they do so. You are hired as caretaker of the properties for a minimal salary. You also decide that it would be a good investment to buy a sail boat or two and lease them through one of the many charter organizations in the Bahamas. When you are all done you still have $1,000,000 invested on the company books and have paid no income tax.

Since you are a company employee you need a salary, so your company pays you a salary that you can live on, but remember you don't need to pay house payment, electricity, etc. So you decide that you can live on $75,000 per year which you dutifully pay your $17,500 taxes. You as COO have to go and check on the company assets on a regular basis so you travel to the Bahamas for meeting with your attorneys and bankers (a company expense), book charters on your boats to see how the organization is treating company property and what kind of job they do etc. etc.

When the year is all done the dinar have been sold for $1,000,000 USD, you have control over a corporation with $1,000,000 in assets, you have paid $17,500 in income taxes and are living the lifestyle of the rich and famous (not really , but pretty good lifestyle). This program can be continued until you die if you invest wisely and don't overspend the corporate income thus leaving a nice inheritance for your kids.

Taxes paid $17,500, assets remaining $1,000,000 (don't go into depreciation and all that at this point)

Ever wonder how the rich and famous earn millions per year and pay next to zero taxes? See scenario #2.

So why doesn't the working man do this and reduce his taxes? It takes about a million dollars to get started. You can start for less but you have to invest in higher risk opportunities in order to generate the cash flow needed to live well.

Think about it, is this cheating the US government out of their rightful taxes? If it is there are a lot of corporations and wealthy individuals cheating the government while you are paying the bill.

I love the thought that went into this. But there is one slight problem for nonbahamians. The Bahamas government(with very few exceptions) does not allow foreigners to own businesses. Nor does the Bahamas allow foreigners to be employed there unless no bahamian is qualified or wants the job. Good ideas though. You'll just have to pick another country-Turks & Caicos or Burmuda??

[Edmond]

I love the idea of moving to the Caribbean, however I still have a kid in school. My guestion is this. I bought over 7 mil. Dinars when I was in Iraq, have no receipts of when I bought them and how much I paid for them. How do I establish a date for long term cap gains and a dollar amount when I convert them??? HELP!

Ed

[Al Baghdaddy]

Plan 1
FedEx me 7M NID. I'll inspect for forgeries with the De LaRue machine I borrowed from Danno.

I'll burn any that are forgeries.

I'll FedEx a receipt for forgeries and send the authentic bills back to you with a duly notarized statement of authenticity.

The forgery receipt you can use to claim loss on your federal taxes. The notarized statement of authenticity will establish a date for LT capital gains.

Plan 2

Call or visit your bank for ideas and suggestions.

Plan 3

Call or visit IRS and ask how you can establish ownership.

Do you have a declaration statement of any kind? Such as used to declare at airport?

My guess a notarized statement will work.

Personally, I VERY HIGHLY RECOMMEND PLAN 1.

I humbly await the FedEx delivery.


On a more serious note, Good luck to us all!

ab

[Okie]

I'm a SCUBA diver and I believe in "planning your dive and diving your plan". The point is all of us need to do some careful planning for our future. Especially if you're like me and believe the Dinar will increase our wealth. I've been an "expat" for the last twenty years and worked and lived in several countries. Right now I'm in Iraq and whether you believe it or not....the future of this country looks good. Going "offshore" is a good way to spend your money wisely. The following link is good reading (example only) of one possibility for handling your money. It happens to be in Panama but searches on the subject will give you more info. than you probably wanted.



http://www.caribbeanliving.com/DominicanRepublic/PFA.htm

[Brojeffrey]

"I love the thought that went into this. But there is one slight problem for nonbahamians. The Bahamas government(with very few exceptions) does not allow foreigners to own businesses. Nor does the Bahamas allow foreigners to be employed there unless no bahamian is qualified or wants the job. Good ideas though. You'll just have to pick another country-Turks & Caicos or Burmuda??"

Actually you aren't owning a business. Your are establishing a limited trust and you are retaining operational control. What you are doing is similar to owning stock in a foreign company.

There are a few legal things that need to be accomplished to make this work. That's why I recommended that you contact a local attorney who knows how to set up these operations. There is a lot of information on the web for free to help quite your concerns before you start spending money.

For a start go and read the following links:

http://www.thebahamasguide.com/business/corpform.html
http://www.bahamasbahamas.com
http://www.dunway.com/taxhaven/html/forming_company.html
http://www.offshore-manual.com/taxhavens/Bahamas.html

Also, you can contact Barclays Bank (this is a BIG bank in the UK). They can help point you in the right directions.

Barclays Bank
Bob Griffiths
Address: PO Box N8350 Bay Street Nassau BAHAMAS
Telephone: 1 (242) 356-8016
Fax: 1 (242) 328-7979
bbplcbah@batelnet.bs

Also, you will notice that I never recommended moving to the Bahamas or being employed in the Bahamas. I spoke of the Bahamas Limited Trust owning property in the US and you being employed by the Bahamian Limited Trust here in the US.

As far as Caymans, Turks & Caicos, Virgin Islands, Bermuda, etc., these are all good options. It just works out that I have have contacts in the Bahamas and have contacts in the US that have made this work for them.

[Mo, Spanish Fort]

As I finish gathering up my papers getting rdy for tax time, I got to thinking about my deductions. Would our purchases in '04 of dinar - bought at a higher price than currently worth if we got thru a broker, be an investment loss? How do currency traders handle this? :confused:

[felcanelo]

I think it would only be considered a loss if you actually sold your Dinars at a lower price. Until then it would be considered an unrealized capital gain or loss. Also, I think whether or not it is recognized on the trading market would have to be taken into consideration. :)

[nozlmn]

Here's a question, I hope its not stupid: I know when you sell real estate you get a one time capital gains exemption up to $250,000. Are investments like whatwe are doing not the same? :confused:

[It's What's For Dinar!]

Unless you are planning on building a house out of dinar, I don't think this will work for you. I would even stay away from doing things such as selling dinar with the house (lovely 3 bedroom completely furnished with 100k worth of dinar) as the IRS are probably too smart for that as well. Check the article below.


"First, the property you're selling must be your principal residence. That means you live in it. This tax break doesn't apply to a house or other property that you have solely for investment purposes. In those cases, the usual capital gains rules apply."

http://www.bankrate.com/brm/news/real-estate/20041018a1.asp

[It's What's For Dinar!]

Sorry for the double post, but here is a great article about capital gains. Everyone is advising that you hold your dinars for at least 366 days so you can get the long term capital gains rate which is a maximum of 15%. If you don't hold for more than a year, you pay at the rate of your ordinary income which can be as high as 35%.

http://www.bankrate.com/brm/itax/tips/20010305a.asp

Personally, when I realize gains, I have no problem paying taxes on them especially with the new lower tax rates which I feel are much fairer. While we should all look to legally minimize our tax burdens, it is troubling that some here are trying to illegally avoid taxes entirely. It's really just not worth it, nobody knows how to make people cry like the IRS. I figure that if I do well with my dinar, I have no problem taking 15% off the top to pay my federal and state taxes and then donate 10% to charity which would still leave me with 75%.

[toryangski]

"I love the thought that went into this. But there is one slight problem for nonbahamians. The Bahamas government(with very few exceptions) does not allow foreigners to own businesses. Nor does the Bahamas allow foreigners to be employed there unless no bahamian is qualified or wants the job. Good ideas though. You'll just have to pick another country-Turks & Caicos or Burmuda??"

Actually you aren't owning a business. Your are establishing a limited trust and you are retaining operational control. What you are doing is similar to owning stock in a foreign company.

There are a few legal things that need to be accomplished to make this work. That's why I recommended that you contact a local attorney who knows how to set up these operations. There is a lot of information on the web for free to help quite your concerns before you start spending money.

For a start go and read the following links:

http://www.thebahamasguide.com/business/corpform.html
http://www.bahamasbahamas.com
http://www.dunway.com/taxhaven/html/forming_company.html
http://www.offshore-manual.com/taxhavens/Bahamas.html

Also, you can contact Barclays Bank (this is a BIG bank in the UK). They can help point you in the right directions.

Barclays Bank
Bob Griffiths
Address: PO Box N8350 Bay Street Nassau BAHAMAS
Telephone: 1 (242) 356-8016
Fax: 1 (242) 328-7979
bbplcbah@batelnet.bs

Also, you will notice that I never recommended moving to the Bahamas or being employed in the Bahamas. I spoke of the Bahamas Limited Trust owning property in the US and you being employed by the Bahamian Limited Trust here in the US.

As far as Caymans, Turks & Caicos, Virgin Islands, Bermuda, etc., these are all good options. It just works out that I have have contacts in the Bahamas and have contacts in the US that have made this work for them.

At the risk of looking dumb, would you recommend Costa Rica as one of those options? Pardon a third world kid asking such silly questions but I really know nothing about such things.

[Brojeffrey]

At the risk of looking dumb, would you recommend Costa Rica as one of those options? Pardon a third world kid asking such silly questions but I really know nothing about such things.
I haven't looked at Costa Rica closely. I understand that they have very attractive cost of living for US expatriates but they don't have the tax haven capability of the carribean islands.

My key point I'm trying to make is that there are a number of ways to legally shelter your profits on this investment when it pays off and that you don't need to engage in activities that will get you in serious legal trouble. Like someone said previously, the IRS really knows how to make a person hurt it they get ticked off at you.

[toryangski]

I haven't looked at Costa Rica closely. I understand that they have very attractive cost of living for US expatriates but they don't have the tax haven capability of the carribean islands.

My key point I'm trying to make is that there are a number of ways to legally shelter your profits on this investment when it pays off and that you don't need to engage in activities that will get you in serious legal trouble. Like someone said previously, the IRS really knows how to make a person hurt it they get ticked off at you.

This dumb third world kid thought that Costa Rica was in the Carribean isles :D :o . I'm not an American so I dont need to worry about the IRS and I intend to pay the taxes that I owe to my country. Just looking for a nice place to invest my "incoming" money. Thanks again. :wave:

[Beach]

"Personally, when I realize gains, I have no problem paying taxes on them especially with the new lower tax rates which I feel are much fairer. While we should all look to legally minimize our tax burdens, it is troubling that some here are trying to illegally avoid taxes entirely. It's really just not worth it, nobody knows how to make people cry like the IRS. I figure that if I do well with my dinar, I have no problem taking 15% off the top to pay my federal and state taxes and then donate 10% to charity which would still leave me with 75%."

Yep. If it all happens like we hope, we'll have a lot more money than we have now. We've been offered this opportunity and the capital gains taxes of 15% are relatively low. I'll just pay it...and happily.

[McDinar]

If we all make out like we expect, I will pay the taxes and :)

[Brojeffrey]

If we all make out like we hope, I will STILL try to pay the minimum taxes as I've always done. I'm not at all for paying more than is required. That is EXACTLY what you're doing if you don't look at existing law to take advantage of any deductions/reductions. Silly to pay more. :drunk:

Absolutely right. It is our responsibility as citizens to pay the taxes required by our government. If someone wants to donate more money to the operation of the government than that which is required it is certainly their option, however, the attempt to villiafy persons who are legitimately examining their options to minimize their taxes is wrong.

Using the logic of those who are going to pay "whatever the goverment wants and smile" anyone who files a long form (in the US) and deducts the maximum authorized deductions is doing something wrong. Obviously (I hope) this position is not held by any thinking person.

The discussion here is very similar to discussing how to best complete the long form of the US income tax.

The proper citizen should pay every penny required in taxes, but should not pay a penny more. Forget about the sneaking money in and out of the banks, past customs, etc. There are plenty of legal options available.

[eosirl2]

There are plenty of legal options available.

Would you care to share?

[bottlebush]

Would you care to share?
Just get a Reeeaaal good CPA to work forya

[Brojeffrey]

Just get a Reeeaaal good CPA to work forya

From what I've seen CPA are good for keeping the books on a business and genereating reports on profits and losses, but by and large worthless on tax minimalization. No negatives intended, but just the way it is. I plan on hiring a good CPA firm in the Bahamas to keep track of my Trust's books.

What you need is a tax attorney, someone who is an expert in tax law. These guys spend their life reading tax law and the changes from year to year. They can tell you what to do and how to do it and stay out of trouble. You see, it's a game to them to see how much money they can not pay for their clients, legally. The challenge is to squeeze every penny out tax liability with out getting the IRS ticked off. The more they save their client the more they feel like they win.

The off shore tax haven was the best advice given me by a tax lawyer who was advising on a $450 Million business deal that I was involved in peripherally. Said he was giving me $5K consultation for the cost of a few drinks. He's a great guy whose goal in life is to see how much money he can legally keep out of the US government's hands. (He has a philisophical problem with how the US is spending the tax payer's money).

There are a lot of options open, I can't tell you what the best way to go for you is. What you need to do, is find a good tax lawyer and spend some time with him (it won't be cheap), outline what your situation is and ask him how to go about cashing out in a manner that is comfortable with your goals and objectives.

[eosirl2]

From what I've seen CPA are good for keeping the books on a business and genereating reports on profits and losses, but by and large worthless on tax minimalization. No negatives intended, but just the way it is. I plan on hiring a good CPA firm in the Bahamas to keep track of my Trust's books.

What you need is a tax attorney, someone who is an expert in tax law. These guys spend their life reading tax law and the changes from year to year. They can tell you what to do and how to do it and stay out of trouble. You see, it's a game to them to see how much money they can not pay for their clients, legally. The challenge is to squeeze every penny out tax liability with out getting the IRS ticked off. The more they save their client the more they feel like they win.

The off shore tax haven was the best advice given me by a tax lawyer who was advising on a $450 Million business deal that I was involved in peripherally. Said he was giving me $5K consultation for the cost of a few drinks. He's a great guy whose goal in life is to see how much money he can legally keep out of the US government's hands. (He has a philisophical problem with how the US is spending the tax payer's money).

There are a lot of options open, I can't tell you what the best way to go for you is. What you need to do, is find a good tax lawyer and spend some time with him (it won't be cheap), outline what your situation is and ask him how to go about cashing out in a manner that is comfortable with your goals and objectives.

Hey, thanks for the advice, I appreciate it.

I will probably have to wait for the Dinar to move before I can afford a tax lawyer.

I am the sort of person who just likes to have his ducks in a row so as to know what my best strategy is before wasting any time after the dinar moves.

[bottlebush]

From what I've seen CPA are good for keeping the books on a business and genereating reports on profits and losses, but by and large worthless on tax minimalization. No negatives intended, but just the way it is. I plan on hiring a good CPA firm in the Bahamas to keep track of my Trust's books.

What you need is a tax attorney, someone who is an expert in tax law. These guys spend their life reading tax law and the changes from year to year. They can tell you what to do and how to do it and stay out of trouble. You see, it's a game to them to see how much money they can not pay for their clients, legally. The challenge is to squeeze every penny out tax liability with out getting the IRS ticked off. The more they save their client the more they feel like they win.

The off shore tax haven was the best advice given me by a tax lawyer who was advising on a $450 Million business deal that I was involved in peripherally. Said he was giving me $5K consultation for the cost of a few drinks. He's a great guy whose goal in life is to see how much money he can legally keep out of the US government's hands. (He has a philisophical problem with how the US is spending the tax payer's money).

There are a lot of options open, I can't tell you what the best way to go for you is. What you need to do, is find a good tax lawyer and spend some time with him (it won't be cheap), outline what your situation is and ask him how to go about cashing out in a manner that is comfortable with your goals and objectives.


Well, Perhaps I spoke to soon. ya see, I have a VERY succesful CPA (my nephew) That owns bowling alleys & an amusment park. He does ALL his own work when it comes to the business & taxes & such. You are correct to get a tax lawyer . I'm just lucky to have such a relative I guess. AND he does'nt charge "Uncle BB" :huge:

[evilbyte]

Here is some answers to capital gains tax, if the GOP get there tax bill we would pay about 7.5% capital gains on any money we profit from. That is if you fit into the middle class taxpayer. read for yourself.


http://www.cato.org/pubs/pas/pa-242.html

What Is the Capital Gains Tax?

A capital gain is income derived from the sale of an investment.[8] A capital investment can be a home, a farm, a ranch, a family business, or a work of art, for instance.[9] In most years slightly less than half of taxable capital gains are realized on the sale of corporate stock. The capital gain is the difference between the money received from selling the asset and the price paid for it.

"Capital gains" tax is really a misnomer. It would be more appropriate to call it the "capital formation" tax. It is a tax penalty imposed on productivity, investment, and capital accumulation.

For all the controversy surrounding the tax treatment of capital gains, that tax brings in surprisingly little revenue for the federal government. In the 1990s capital gains tax collections have amounted to between $25 billion and $30 billion a year. As Figure 2 shows, capital gains taxes are just 6 percent of personal and corporate income tax receipts and just 3 percent of total federal revenues. Even if the capital gains tax were abolished entirely, and there were no offsetting receipts, the federal government would still collect 97 percent of its total tax receipts each year.

Executive Summary

The most controversial provision of the Republicans' tax reduction package to be voted on later this fall is the proposal to cut the capital gains tax. The Contract with America proposal would provide a 50 percent exclusion for capital gains, lowering the top effective tax rate to 19.8 percent, and index capital gains for inflation. Opponents charge that those changes would provide a huge tax cut for the rich and substantially reduce federal tax revenues.

This study examines the historical experience with the capital gains tax in the United States, as well as the findings of more than 50 economic studies on capital gains taxation. We conclude that a capital gains tax cut would

substantially raise tax collections and increase tax payments by the rich;
increase the rate of capital formation, economic growth, and job creation through the year 2000;
unlock hundreds of billions of dollars of unrealized capital gains, thus promoting more efficient allocation of capital;
expand economic opportunities for the most economically disadvantaged workers by bringing jobs and new businesses to capital-starved areas, such as America's inner cities.
Finally, the study argues that the capital gains tax is so economically inefficient--because of its punitive effect on entrepreneurship, thrift, and investment--that the optimal economic policy for the United States would be to abolish the tax entirely. :wave:

[tazish]

[QUOTE=evilbyte] That is if you fit into the middle class taxpayer.

If the dinar does what we want, we're not going to "fit into the middle class taxpayer." I hope I get the opportunity to pay 35%!!!

[Dinar Duchess]

It doesn't make you a cheat if you don't agree with paying the taxes. Shoot, there are several taxes that I think I shouldn't have to pay, but I pay them because "they" say I have to.

There MAY be ways of not having to pay as much ... not checked with my accountant. I doubt it when it comes to this particular matter, though. I could be wrong. It's the "loop holes" that a person looks for that are not on the up and up OR the person that flat out doesn't pay that makes one a cheat, in my opinion.

To each his own.

Probably gonna get bashed for this one. Shoulda stayed in my little corner. :lmao:

Absolutely right, I think some taxes are unreasonable. Capital Gains Tax at 40 per cent is outrageous. I know a lady whose husband died, they both had built up a letting business where they bought a couple of houses, refurbished them and provided a good service for students giving them cheap rents. She is now forced to sell but out of her house sales 40 % goes to the Tax man. Out of £300K, she may have to pay about £100K Bit unfair I think. I think CGT ought to come down a bit thats all. Then maybe people would be encouraged to do more. Doesnt mean they are cheats, just fed up of endless paying to the government on everything we do. May I say, I and countless others on this forum all support our boys and girls who are doing a great job in Iraq and I support them 100 %. :wave:

[Panther]

Personally, when I realize gains, I have no problem paying taxes on them especially with the new lower tax rates which I feel are much fairer.

This is one of the big reasons tax revenues increase when the rates are lowered. Its cheaper to pay the taxes than to try and avoid them.

[v1rotv2]

Hold your dinar for one year! Maybe cash in a little to make the wait easier.

[SEABEE CAN-DO]

I have heard alot of people mentioning trading in under $10,000 at a time to avoid taxes. I understand the idea but in the end it will cause you more headaches than it's worth. I work at a casino and I see this all the time.

What most people don't know is if you cut short of the 10 grand most institutions are required by law to fill out a SAR (Suspisious Activity Report) Form. This is our systems way of tipping off the IRS and law enforcement of possible money laundering. It is a 99% guarentee of a tax audit. Then you'll have to deal with all the legal problems that come with trying to evade taxes.

Like I said, this is what I know from the casino industry so I can't say it will be the same for banks and such but it would only make sense that it would be. Save yourself a big headache, pay the taxes and enjoy the rest of your new riches in peace. :)the wise did not need this , the dummies do.
word to the dummies

[Warren2173]

YUP, THANKS! :drunk:

[ShadowMaster]

I thought this might help explain.

http://www.fool.com/taxes/2003/taxes030613.htm

If you wait till 2008 to exchange there is no Federal tax!

You can only get the current 5% tax rate, which will turn to 0% tax rate in 2008 if you're close or near the poverty line. I don't recall what yearly income you needed to be below, just that I don't qualify. :(

[crave681]

I realize now i should have just started an acct at Warka, but since i didnt, does anyone know any other way to establish that i ve had these things for 2 years? thanks :wave: