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Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules

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Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules Empty Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules

Post by Ponee on Fri Jun 07, 2013 9:45 am

Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules


Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules Rgreen_40Robert A. Green, CPA, Contributor




Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules 300px-Half_Dinar_front
Iraqi dinar

My recent blog, “Is The Iraqi Dinar Worthless Paper Or Maker Of Millionaires?” generated a firestorm of comments and opposing views. Here are some additional tax answers to questions and comments made.
Various IRS publications discuss tax rules for physically-held currency held for personal-use, mentioning capital gains treatment on gains, and no tax-deductible loss (capital or otherwise) on personal-use losses. These are standard tax rules for personal-use property. Taxpayers may only deduct capital losses on investment (Section 212) or trade or business (section 162) property.

Taxpayers who purchase Iraqi dinars generally are buying dinars for investment purposes, not personal-use. An example of personal use would be buying euros to use while traveling in Europe for personal reasons.
When it comes to physically-held currency and forex transactions (spot and forward) held for investment or business use, Section 988 (foreign currency transaction) tax rules apply. Section 988 is ordinary gain or loss tax treatment. Good news, the capital loss limitation of $3,000 per year does not apply to Section 988 ordinary losses.
An investor holding forex as a capital asset may file a contemporaneous election to opt-out of Section 988 into capital gains and loss rules, otherwise known as the capital gains election. But if you invest in physically-held currency, Section 988 does not permit you to opt-out of Section 988.

In summary, if you heard from an accountant, the IRS or a friend that capital gains apply by default to physically-held currency, that answer is only correct for personal-use sales of physically-held currency. It’s incorrect for the sale of physically-held currency or forex held for investment or business purposes. And don’t forget, you can’t take a tax loss of any kind (capital or ordinary) on the sale of personal-use physically-held currency either.

http://www.forbes.com/sites/greatspeculations/2011/09/21/iraqi-dinar-investing-does-not-trigger-irs-personal-use-rules/

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Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules Empty Re: Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules

Post by clayf on Fri Jun 07, 2013 10:18 am

You know these articles about taxes on my dinar ,I DONT CARE!!!. If I were to cash out at at say 6 mil and the tax man said you owe 3.5 mil I would still say I DONT CARE..Ive already hit the Jackpot. Heck 1 mil is good Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules 2805820865
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Post by Jayzze on Fri Jun 07, 2013 8:09 pm

i care i will pay as little if romney pays only 14% on 25 mil i do not want to pay more to this gov
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Post by clayf on Sat Jun 08, 2013 12:29 am

shoot!! 3.5 Im off the grid..... Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules 3485529143
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Post by Terbo56 on Sat Jun 08, 2013 9:51 am

They ain't gettin' mine-Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules 4115835343Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules 1656125192Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules 1656125192
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