Let's Settle Capital Gains Issue

Here is what I read and summarized from the related IRS regulations. BE SURE TO CHECK WITH YOUR TAX ADVISER!!

IRS Publication 525:

Foreign currency transactions: If you have a gain on a personal foreign currency transaction because of exchanges in exchange rates (like all of us), you do NOT have to include that gain in your income unless it is more than $200 (duh - that's ALL of us). If the gain is more than $200, report it as a capital gain.

2010 Instructions for Schedule D (Note: Instructions for 2011 not yet released)


Use Schedule D to report the following: (we all appear to be in this group)

Capital Gains and Losses - The sale or exchange of a capital asset (defined below) not reported on another form or schedule (that's us again)

Definition: Most property you own for personal purposes, pleasure, or investment is a capital asset. For example, your house, furniture, car, stocks and bonds are capital assets.

Short Term or Long Term: Separate your capital gains and losses according to how long you held or owned the property (dinar). Here's one of the main reasons that we kept our receipts.

The holding period for short-term capital gains and losses is 1 year or less.
The holding period for long-term capital gains and losses is more than one year. (Less taxes with long-term - see below)

Long Term Capital Gains TAX in 2011 - Held Longer Than One Year

0% for taxpayers in the 10% & 15% bracket
15% if you are in the 25%, 28%, 33% & 35% bracket


Short Term Capital Gains TAX in 2011 - Held Less Than One Year

Standard income tax rates up to 35%

By the way, if you have over $379,150 in gains, you will be taxed at the maximum 35%. I hate taxes, but I also feel with our gains, we better not upset the IRS. Be sure to check with your tax adviser.


Here are the overall tax rates:



Go RV!

http://www.irs.gov/pub/irs-pdf/p525.pdf

http://www.irs.gov/pub/irs-pdf/p550.pdf

http://creditguide.hubpages.com/hub/Long-Term-Short-Term-Capital-Gains-Tax-Rate

http://www.savingtoinvest.com/2010/04/2010-and-2011-tax-brackets-new.html

Great post, should clear up some misconception of the tax law. Thanks for the post Dollarbill! AJ

Seems pretty cut and dried! Suppose that you are under a year, are you still obligated to 35% if you don't cash in until you have held it for one year?

Thank you for taking the time to post this, great job!

dollarbill,


It is very obvious that you put in a great deal of time on your post!

Thanks for the comprehensive information.

I'm still holding out hope that Santa will bring me a lower tax amount but I'm not counting on it!

Thanks again for the work!

AWESOME!
AND UNDERSTANDABLE!

THANK YOU!

After all the abuse you have taken from the IRS and their fiat money you still want to give these guys 35% of what they did not earn? these folks make up "laws" to suit their desires (greed) and have done so since 1913... What do you think Ron Paul is trying tot tell you about this pseudo-government agency? and just to make it all clear, I know most people think that when they pay their income tax (for which there is NO actual law, just a lot of intimidation) NOT ONE PENNY OF WHAT YOU PAY GOES TO OUR GOVERNMENT... IT GOES TO THE FEDERAL RESERVE BANKS...PERIOD. IF YOUR CANCELED TAX CHECKS HAVE THE WORDS PRINTED ON THE REVERSE SIDE "PAY TO THE ORDER OF ANY FRB" THEN YOU DID NOT PAY THE GOVERNMENT, YOU PAID THE FEDERAL RESERVE BANK!
YOU HAVE BEEN HOAXED, AND HOAXED AND HOAXED SINCE 1913...
JUST FOR THE HECK OF IT YOU MIGHT WANT TO READ A BOOK TITLED, "THE CREATURE OF JEKYLL ISLAND".

I take it your looking for a way out?

DevaronDLH wrote:After all the abuse you have taken from the IRS and their fiat money you still want to give these guys 35% of what they did not earn? these folks make up "laws" to suit their desires (greed) and have done so since 1913... What do you think Ron Paul is trying tot tell you about this pseudo-government agency? and just to make it all clear, I know most people think that when they pay their income tax (for which there is NO actual law, just a lot of intimidation) NOT ONE PENNY OF WHAT YOU PAY GOES TO OUR GOVERNMENT... IT GOES TO THE FEDERAL RESERVE BANKS...PERIOD. IF YOUR CANCELED TAX CHECKS HAVE THE WORDS PRINTED ON THE REVERSE SIDE "PAY TO THE ORDER OF ANY FRB" THEN YOU DID NOT PAY THE GOVERNMENT, YOU PAID THE FEDERAL RESERVE BANK!
YOU HAVE BEEN HOAXED, AND HOAXED AND HOAXED SINCE 1913...
JUST FOR THE HECK OF IT YOU MIGHT WANT TO READ A BOOK TITLED, "THE CREATURE OF JEKYLL ISLAND".

question according to your chrt in the 15 percent bracket you pay zero capital gains tax that cannot be can it

jayzze wrote:question according to your chrt in the 15 percent bracket you pay zero capital gains tax that cannot be can it

1) These charts are all from the IRS, not me.
2) If I understand your question - the chart with the tax brackets are your overall FEDERAL tax. I included just to inform about overall IRS tax rates.
3) If your dinar gains are SHORT TERM (you have held the dinar less than 1 year), you will pay the rates shown in the table. So, you just add your dinar gains (in full) to your regular income. Then you are taxed for the combined income - regular income + 100% of your dinar gain
4) If your dinar has been held over 1 year (long-term) you will be taxed on: your dinar gain X 15% + your regular income.

Go RV!

KathyD wrote:Seems pretty cut and dried! Suppose that you are under a year, are you still obligated to 35% if you don't cash in until you have held it for one year?

Thank you for taking the time to post this, great job!

KathyD If you have held your dinar for 350 days and it RVs - you would save 20% of your gain in taxes if you did NOT cash in until 1 day after a year. So, if you have 300,000 dinar and an RV rate of $4.00 (this rate is only for example) = 300,000 X $4 = $1,200,000 less your cost (here we will use $400) = $1,199,600. $1,199,600 X 20% = TAX savings of $239,920 by waiting until you held it for 1 year. (35% - 15% = 20%)

Go RV! :cheers:

kathy thanks i will pay 15 vs 35 anytime

Peppermint Patti wrote:Dollarbill,

I love your reindeer...

Peppermint Patti...

Me too Patti - It must have been Miskebam. Thanks Miskebam! :rendeer:

KathyD wrote:Seems pretty cut and dried! Suppose that you are under a year, are you still obligated to 35% if you don't cash in until you have held it for one year?

Thank you for taking the time to post this, great job!

The tax due, no matter if it long or short term, is due for the year you realize the gain.
So if it RV's between now and Dec 31, and you cashin, your tax year is 2011, if you wait to cashin till after Jan 1, then tax year would be 2012,

Some of us are going to have to get the calender and reciepts out and hope they don't change the tax laws in 2012.

tajmah09 wrote:1Alaskan My question is what if the dinars you hold were a gift? How would the taxes play out?

Gift or not, there will still be a gain. AJ

OK. Can anyone answer my question? Please.

Thank you. Any other input welcome.

AJAnderson wrote:I take it your looking for a way out?

DevaronDLH wrote:After all the abuse you have taken from the IRS and their fiat money you still want to give these guys 35% of what they did not earn? these folks make up "laws" to suit their desires (greed) and have done so since 1913... What do you think Ron Paul is trying tot tell you about this pseudo-government agency? and just to make it all clear, I know most people think that when they pay their income tax (for which there is NO actual law, just a lot of intimidation) NOT ONE PENNY OF WHAT YOU PAY GOES TO OUR GOVERNMENT... IT GOES TO THE FEDERAL RESERVE BANKS...PERIOD. IF YOUR CANCELED TAX CHECKS HAVE THE WORDS PRINTED ON THE REVERSE SIDE "PAY TO THE ORDER OF ANY FRB" THEN YOU DID NOT PAY THE GOVERNMENT, YOU PAID THE FEDERAL RESERVE BANK!
YOU HAVE BEEN HOAXED, AND HOAXED AND HOAXED SINCE 1913...
JUST FOR THE HECK OF IT YOU MIGHT WANT TO READ A BOOK TITLED, "THE CREATURE OF JEKYLL ISLAND".

It doesn't appear to me that Devaron is attempting a way out. Dev is simply stating the truth of what is going on - if anyone out there is listening. Are you listening? Pay attention this is important for all to know. Changes are under way.

i see that it has not been said,so, until you cash in [all or part of] your dinar you have not created a taxable event.there is also some question that if for instance you traded dinar for swiss francs that that would be taxable until you traded for us dollars.

:cheers:

dollarbill, your original post is right on the money. I teach tax law and you are completely correct. Textbook demonstration with support if I may say so myself.

God bless.

tajmah09 wrote:1Alaskan My question is what if the dinars you hold were a gift? How would the taxes play out?

I think first, you should ask a CPA that question, but IMHO, It will be taxed the year you cash out, and would be taxed at what any GIFT would be taxed, Weither it was USD, Socks, Bonds or IQD converted into USD.

But again, ask you tax guy!