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Currency Exchange vs Investment
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Currency Exchange vs Investment
I tried to find a topic about this somewhere on here but couldn't find the answers I think Im looking for, so my apologies if this has been discussed before.
I have seen the IQD/VND called an investment and a currency exchange. To me this would be an investment...you pay money for an asset that hopefully turns around and makes you more money than you put in. But it is also a currency exchange...same thing I did when I went to England last month...used USD to buy GBP(or in our case USD to buy IQD/VND).
So what is it that we are in right now?? It can be looked at as both IMO...but I know the tax implications will swing massively one way or another. I have seen recommendations of set aside half for taxes up to it wont be taxed at all. My accountant said from the best of his knowledge it "should" be taxed as an investment which is from 18-24%.
Opinions....
I have seen the IQD/VND called an investment and a currency exchange. To me this would be an investment...you pay money for an asset that hopefully turns around and makes you more money than you put in. But it is also a currency exchange...same thing I did when I went to England last month...used USD to buy GBP(or in our case USD to buy IQD/VND).
So what is it that we are in right now?? It can be looked at as both IMO...but I know the tax implications will swing massively one way or another. I have seen recommendations of set aside half for taxes up to it wont be taxed at all. My accountant said from the best of his knowledge it "should" be taxed as an investment which is from 18-24%.
Opinions....
BritishBulldog- VIP Member
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Join date : 2013-09-20
Re: Currency Exchange vs Investment
I would agree with your banker. Consider the source of the "exchange" and "IQN" verbiage.
*****************
Trust but Verify --- R Reagan
"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18
Kevind53- Super Moderator
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Re: Currency Exchange vs Investment
Hmmm, 18 - 24% sounds like capital gains, but captial gains are also paid on an exchange if you make over a $200 profit. If it gets classified as a currency investment, it might just come under section 988 (which is where the currency traders get taxed), part CG and part income tax. Somebody posted on recaps that he found some regulations (maybe treasury dept.) that said you cannot have a currency investment unless that currency is internationally traded. I didn't follow up on what he said so don't know if it is correct. It was in comments I think an not by a guru.
catman- VIP Member
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Join date : 2012-04-28
Re: Currency Exchange vs Investment
Catman your probably right that it is capital gains. Im sure that as many rules as there are that they didn't sit down and say "OK if you made money this way you get taxed XX%, like this XX%, like this XX%" etc. I'm sure the amount you pay will depend on who your accountant is and how good they are...
BritishBulldog- VIP Member
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Re: Currency Exchange vs Investment
according to my fa if and when it happens you will pay taxes one way or another he figures one term plus obamacare tax a tad under 34 percent plus state tax
Jayzze- VIP Member
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Join date : 2011-06-23
Re: Currency Exchange vs Investment
jayzze, what is "one term"? Can't see how your fa can get "a tad under 34 percent" If it is cap gains it will be 20% plus 3.8% Obamacare. If it is income tax it will be the max rate (assuming a good RV rate) and that is 39.6%. Unless, it goes into next year and then who knows. An interesting question is, if it happened today, how much of a quarterly tax would you pay? Missing it by more than the allowed percentage get expensive.
catman- VIP Member
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Join date : 2012-04-28
Re: Currency Exchange vs Investment
Last quarter of the year, so something like March 1st ... I think?catman wrote:jayzze, what is "one term"? Can't see how your fa can get "a tad under 34 percent" If it is cap gains it will be 20% plus 3.8% Obamacare. If it is income tax it will be the max rate (assuming a good RV rate) and that is 39.6%. Unless, it goes into next year and then who knows. An interesting question is, if it happened today, how much of a quarterly tax would you pay? Missing it by more than the allowed percentage get expensive.
*****************
Trust but Verify --- R Reagan
"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18
Kevind53- Super Moderator
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Re: Currency Exchange vs Investment
Actually, if I remember right, it does not apply if you have not had to file est taxes before ....
*****************
Trust but Verify --- R Reagan
"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18
Kevind53- Super Moderator
- Posts : 27254
Join date : 2011-08-09
Age : 24
Location : Umm right here!
Re: Currency Exchange vs Investment
i made a mistake sorry its not 34 but three and 3 quaters percent or as i figure 24 bpercent plus state tax
Jayzze- VIP Member
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Join date : 2011-06-23
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