Taxes

[Alfonz]

Sorry I didn't know where to post this question, so i just did it here hopefully it works out. does anyone know how to avoid the taxes that we will have to face when we withdraw our huge cash in, hopefully. Is there some new investment that would allow us to avoid tax, such as a roth IRA or something? I don't know anything about this stuff so I could use some help thanks.

[MotorDown]

Sorry I didn't know where to post this question, so i just did it here hopefully it works out. does anyone know how to avoid the taxes that we will have to face when we withdraw our huge cash in, hopefully. Is there some new investment that would allow us to avoid tax, such as a roth IRA or something? I don't know anything about this stuff so I could use some help thanks.

First, don't try to avoid paying Uncle Sam his dues or you'll probably have more troubles than you want. If you're making millions, then what's a couple of hundred-thousands?

Second, go to search engine (top) type in taxes and you can read a bunch of suggestions.

[PghRiverRat]

Sorry I didn't know where to post this question, so i just did it here hopefully it works out. does anyone know how to avoid the taxes that we will have to face when we withdraw our huge cash in, hopefully. Is there some new investment that would allow us to avoid tax, such as a roth IRA or something? I don't know anything about this stuff so I could use some help thanks.
For something this important, you may want to consider just calling a tax attorney and qualified investment advisor, rather than solicit advice from an internet forum. JMO. If you read the many threads and posts here on the subject, that's about what it all boils down to.

[Geoff]

For something this important, you may want to consider just calling a tax attorney and qualified investment advisor, rather than solicit advice from an internet forum. JMO. If you read the many threads and posts here on the subject, that's about what it all boils down to.

Ditto. A good financial planner will be worth his/her weight in gold. My advice would be to seek out fee-based, certified financial planners. Find several, and conduct interviews. After all, they will be working for you, right? Be assertive, and don't settle for just anyone. You want to have good chemistry with your planner. I would avoid commission-based planners, who work for corporate entities such as American Express, for example. You want an independent planner who will work on a fee-for-service basis. Here is a great website with a number of good resources, including info on how to navigate thru the selection process (asking the tough questions, etc.).

http://www.napfa.org/index2.htm

[Basenji]

Some very good advice which I intend to follow. I have all my ducks in a row. :D :D

BJ

[DrRaf]

I called the IRS to find out once and for all about this tax thing. They are going to call be back in 1-5 business days and let me know. Sounds like they have to research it. When they call back, I want to get detailed information on where they got their information from. Like Book number, page number year published and ETC... i also asked about if its less than $10,000 and also more than $10,000.

Here is the link to the form that it looks like will have to be filled out if cashing in $10,000 or more. http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Once you go to the web site just download form "1203 Form FinCEN104 Currency transaction Report". It looks like the financial institution you cash your Dinars in at will be filling out this form on you.

Anyway as soon as they call me back I wall post the information.

[Basenji]

I called the IRS to find out once and for all about this tax thing. They are going to call be back in 1-5 business days and let me know. Sounds like they have to research it. When they call back, I want to get detailed information on where they got their information from. Like Book number, page number year published and ETC... i also asked about if its less than $10,000 and also more than $10,000.

Here is the link to the form that it looks like will have to be filled out if cashing in $10,000 or more. http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Once you go to the web site just download form "1203 Form FinCEN104 Currency transaction Report". It looks like the financial institution you cash your Dinars in at will be filling out this form on you.

Anyway as soon as they call me back I wall post the information.

Good post, I downloaded the forms, looks good from here. Now then when the IRS gets back to you with your question, find out what the tax rate will be for that transaction. :D

BJ

[Fortunae]

I called the IRS to find out once and for all about this tax thing. They are going to call be back in 1-5 business days and let me know. Sounds like they have to research it. When they call back, I want to get detailed information on where they got their information from. Like Book number, page number year published and ETC... i also asked about if its less than $10,000 and also more than $10,000.

Here is the link to the form that it looks like will have to be filled out if cashing in $10,000 or more. http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Once you go to the web site just download form "1203 Form FinCEN104 Currency transaction Report". It looks like the financial institution you cash your Dinars in at will be filling out this form on you.

Anyway as soon as they call me back I wall post the information.

Anyone know of any other advice other than Capital Gains Tax for the UK?

[markw]

I too have been 'tax' digging today. Called the IRS 1st, 4 dept's later, told a 'manager': "a friend exchanged USD for 2 mil Iraqi dinar, went on a tour, came back home to US, was told not to exchange it back just yet due to coming back on the world market, if it comes back on at a higher value than what it currently is, will the increased value have to be taxed" == IRS manager told me 'NO' if it is a currency exchange vs. earned income.
Then called H&R Block and a local "TAX Help" tax advisor. Told them both the actual/factual truth of what I and most everyone on these posts have done & waiting to happen. H&R Block said 'NO' taxes due to the "exchange". The tax advisor elaborated a little more:

Mark:

I ran yr question by three CPA's, two EA's, a tax attorney and an IRS man I know and got nearly as many opinions on your question as the number of people I asked! No consensus, except, everyone doing a lotta scratching of their heads. IRS Pub 514 details foreign tax credit on "earned income" and did not seem to answer your particular question (or wrinkle on this question)directly. (typical of almost all so-called IRS "guidance" and my IRS guy was hedgy about hanging your hat/ argument on Pub 514). Sooo, the best advice in cases like that, is to err on the side of caution and set aside 35% to 40% for taxes as a worst case-scenario, should you claim it at all. As with so many tax issues, the answer is usally not "yes" or "no" but rather, "it depends." :)


Jay Blucher
Tax Help, Inc.


You'd think someone would know the true answer. All I've seen on here is yes/no/yes/no, then all I can get from people you'd think should know is uncertainty also!!! I'll definitely put about 35% in savings or something just in case, just wish we could get a straight answer. === Any other insight?

[chica]

perhaps the irs defaults to "it depends" type responses because federal income taxes are essentially unconstitutional and would have no legal basis or enforcement if it were not for tax courts and strong-arm tactics that make the public paranoid and submisive to the "authorities"...

ok i guess i should save my ranting for after the 16th of August

[Edmond]

I talked to my tax lady on Thur. and she said it was capital gain so you have to pay. I ran a scenario by her that goes like this.

"I went to Iraq and bought 5 mil dinars, currency that is not recognized in any other country but Iraq. It was not recognized as currency by the FOREX and can not be exchanged for other currency in the U.S. Basically the U.S. considers it worthless. One day it is accepted on the FOREX and I exchange it for the initial price it apprears on the FOREX with. Do I have a capitol gain since it was not recognized as an exchangable currency by the U.S., the banks, or the IRS for that matter when I bought it".

Her answer was YES, and if you try to hide it the will crawl up your a$$ when they find out, and they will find out.

But I'm still not satisified with her answer. I want to be as educated about exchanging the dinars and filing taxes on it as the person doing my taxes.

I will continue to search for more info.

Ed

[Count Dinar]

I talked to my tax lady on Thur. and she said it was capital gain so you have to pay. I ran a scenario by her that goes like this.

"I went to Iraq and bought 5 mil dinars, currency that is not recognized in any other country but Iraq. It was not recognized as currency by the FOREX and can not be exchanged for other currency in the U.S. Basically the U.S. considers it worthless. One day it is accepted on the FOREX and I exchange it for the initial price it apprears on the FOREX with. Do I have a capitol gain since it was not recognized as an exchangable currency by the U.S., the banks, or the IRS for that matter when I bought it".

Her answer was YES, and if you try to hide it the will crawl up your a$$ when they find out, and they will find out.

But I'm still not satisified with her answer. I want to be as educated about exchanging the dinars and filing taxes on it as the person doing my taxes.

I will continue to search for more info.

Ed

I talked to my tax guy who actually worked for the IRS in his career before he went into the private sector. He said that most "tax people" are just going to default to the claim of " Just tell the IRS" rather than saying there is a good chance that you aren't taxed. This is for the simple reason that if you hire them and they give you a "no" consult, then they could get screwed. It's just a lot of them covering their own butt's

[mechtech]

There's lots of good info on this thread and I still have some digging to do myself.

-------------------------
Sort of like economists;

"If you you took all the economists in the world and placed them end to end you'd never reach a conclusion." :eek:

[DrRaf]

Still waiting for a reply. What I want to get is something from the IRS in writing. Like I mentioned before, I want to get detailed information on where they got their information from. Like Book number, page number year published and ETC... I have a reference number and if I get it in writing and if they say no you don't have to pay at least I have the documentation. If they say yes you have to pay then I have no problem paying. I don't have a large amount invested so every penny I can keep is better for me.

I will post what I find out and any documentation they give me.

[buck74]

I talked with the IRS a couple of months ago. They said anything over 10k USD would be considered capital gains, and taxed as such. If the dianr are held under a year it is short term - the same as your tax bracket. If it is over a year it is 5,10, or 15 per cent depending on your tax bracket, use schedule D. This is what I was told, it seems different people sometimes say different things.

[DaddyDinar]

This is IRS Publication 525:
http://www.irs.gov/pub/irs-pdf/p525.pdf

go to page 28...last paragraph...

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 than $200, report it as a capital gain.

--------------------------------------------------------------------------
This is the IRS code for:
§ 988. Treatment of certain foreign currency transactions
http://www4.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000988----000-.html

[Okie]

If you're thinking of hiding money offshore....read this article:

http://www.risad.com/hide_offshore.htm

I think I'll stick to my plan of letting one of the big accounting firms give me a plan for my money and then following it!

[DrRaf]

Attached is the reply I finally got a reply from the IRS. Looks like in short pay your taxes. I have not gone to the WEB sites in the letter but will later.

[Dinars2Dollars]

The way I read this, the IRS is assuming you have bought or sold "currency contracts" and in that case I would agree it should be treated much like a stock transaction. However, the question I have is how do they treat hard currency - i.e. paper bills and coins. I would think it would be hard to track this as an investment. I posted before that I went to Mexico this summer and exchanged dollars for pesos and then changed back to dollars when I returned. There will be no profit/loss entered on my tax return. At the point in time you exchange your foreign currency for dollars you are asking for an equivalent exchange. You give them X value in foreign currency and they give you the same X value in dollars. No contract just even exchange. Maybe a better question to ask is how do they handle hard currency rather than currency contracts.

[IraqiFreedom]

TI went to Mexico this summer and exchanged dollars for pesos and then changed back to dollars when I returned. There will be no profit/loss entered on my tax return. At the point in time you exchange your foreign currency for dollars you are asking for an equivalent exchange...Maybe a better question to ask is how do they handle hard currency rather than currency contracts.The information provided above applies to physical dinar, pesos, whatever. The IRS does not consider anything but the US dollar currency. Anything else is a capital asset. There is a special election that can be made for currency contracts that might be an interesting read, but does not likely apply.

With regard to your Mexico analogy, essentially pocket money (that which you hold for normal daily transactions) is not taxable as a capital gain with guidelines indicated in DaddyDinar's post. This is because of the reporting burden for very small differences in valuation.

Everything in this thread has been rehashed several times in this forum, so please search.

[Celmac]

Anyone have opinions on what financial advisors are good? I hate to just pick one at random out of my yellow pages but I don't know anyone with enough money to bother going to one, hence, no one to give me a recomendation. :confused:

[c.o. jones]

http://channels.netscape.com/ns/tv/story.jsp?idq=/ff/story/0001%2F20050908%2F2040036880.htm&sc=1401&photoid=20050125NY126

"Hatch faces a maximum of 75 years in prison if found guilty on all charges. He also could face millions of dollars in fines...
In 2002, Hatch was found innocent of assaulting his ex-boyfriend. "

Evidently, Mr. Hatch failed to claim $1,355,000 in income and misused $36,500.

This is a major setback in his life. He faces fines that are multiples of the income he failed to claim.

He probably won't be able to choose his cellmate in prison.
He must 'butch up', else he will not be Rich, he will be Beeatch.

The risks in this ID speculation are more than enough for me. I will not add more risks by attempting to evade taxes.

I will hire a team including an attorney specializing in funds management, a certified financial planner and a cpa. Each will be responsible to me.

This is just my opinion.

[F355]

http://channels.netscape.com/ns/tv/story.jsp?idq=/ff/story/0001%2F20050908%2F2040036880.htm&sc=1401&photoid=20050125NY126

"Hatch faces a maximum of 75 years in prison if found guilty on all charges. He also could face millions of dollars in fines...
In 2002, Hatch was found innocent of assaulting his ex-boyfriend. "

Evidently, Mr. Hatch failed to claim $1,355,000 in income and misused $36,500.

This is a major setback in his life. He faces fines that are multiples of the income he failed to claim.

He probably won't be able to choose his cellmate in prison.
He must 'butch up', else he will not be Rich, he will be Beeatch.

The risks in this ID speculation are more than enough for me. I will not add more risks by attempting to evade taxes.

I will hire a team including an attorney specializing in funds management, a certified financial planner and a cpa. Each will be responsible to me.

This is just my opinion.
Here is a chance for a new reality series...I was a reality TV show winner LOSER!...maybe he can get on Jerry Springer? :lmao:

[joanc1963]

Sorry I didn't know where to post this question, so i just did it here hopefully it works out. does anyone know how to avoid the taxes that we will have to face when we withdraw our huge cash in, hopefully. Is there some new investment that would allow us to avoid tax, such as a roth IRA or something? I don't know anything about this stuff so I could use some help thanks.

I came accross this site. It should be useful for all you yanks. Tax avoidance (not the same as evasion). Investments and trusts. A lot of reading but it may answer some questions.
http://www.tax-freedom.com/mainmenu.htm

Such gems as follows:

"STOCK MARKET INVESTORS
Are you...
....interested in finding out how to invest in stocks, bonds, mutual funds, T-Bills, commodities, options, futures, etc., WHILE LEGALLY PAYING NO TAX WHAT-SO-EVER ON ANY OF YOUR PROFITS, INTEREST, OR DIVIDENDS ? Are you interested in learning more about the world's leading financial centers?"

"USING TRUSTS TO SHELTER YOUR ESTATE"

....Ad infinitum...

Enjoy!!