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Gifting Letter

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Gifting Letter Empty Gifting Letter

Post by childofgod on Tue Aug 16, 2011 11:55 am

Gift pre-RV, however the IQD MUST be in the recipients physical possession to consider the gift legal .. this is according to Clint Coons from Anderson Law Group.

Here's a gift letter you may want to consider;



My name is [my name], also known as [drop your middle initial or add any other AKA here]. I am producing this affidavit to memorialize a completed gift of __[quantity]____________ Iraqi Dinar note to my [relationship- i.e. friend, son, daughter] , [recipient’s name].



The intent of this letter is to establish the time of gift and basis of the gift for gift tax valuation purposes and to provide documentation of the transfer in the case that such documentation is ever necessary for [recipient’s name] to exchange the gifted nonfunctional currency for other currency.



ESTABLISHING DATE

I, [my name], located in the city of [city], state of [state], on the _____day of _______, 2011 did gift a note(s) of currency of the Iraqi government with a total value of __[quantity]____________ Iraqi Dinar to my [relationship], [recipient’s name], living in the city of [city], state of [state] without compensation or expectation of gain for myself.



This gift was accomplished by placing said note(s) in the mail with the USPS, limited delivery, postage paid, and properly addressed as follows:



[recipient’s name]

[street address]

[city] [state] [zip]



ESTABLISHING TRAIL OF TITLE

On the ___ day of ______________ 2011 I exchanged $[purchase price of Dinar] of United States currency for [total quantity of that purchase as reflected by receipt] Iraqi Dinar (IQD). The above referenced Dinar was received by me in this transaction. I conducted this transaction with [name of currency dealer] located in the city of [city], state of [state] under the order # of [order number].



I hereby affirm and attest that the above statement is true and correct to the best of my knowledge.



________________________________

[my name], Affiant

This instrument was on the date thereof signed, published and declared by [my name] to be a true affidavit in our presence and in the presence of each of us, and we, at the same time, at the affiant’s request, in the affiant’s presence and in the presence of each other, have hereunto signed our names and addresses as attesting witnesses.



_______________________, Witness

[Witness1 Name]

[Witness Address]______________

_____________________________

_____________________________







_______________________, Witness

[Witeness2 Name]

[Witness Address]______________

_____________________________

_____________________________









STATE OF ________________________ )

) ss.

COUNTY OF _______________________ )

On this day, _______________________, 20___, before me personally appeared [my name], as affiant, personally known to me (or proved to me on the basis of satisfactory evidence) to be the individual whose name is subscribed to the foregoing Affidavit of Gift, and acknowledged that he[she] executed the same as his[her] voluntary act and deed for the purposes therein contained. Also appeared before me ____________________ as witness personally known to me (or proved to me on the basis of satisfactory evidence), and _______________________ as witness personally known to me (or proved to me on the basis of satisfactory evidence) who did witness affiant’s signature in his presence and in the presence of each other.

Witness my hand and official seal.

[Seal]



____________________________, Notary Public

My commission expires: ______________________
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Post by tomb22 on Tue Aug 16, 2011 12:18 pm

Good Letter, thanks.

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Post by Ponee on Tue Nov 18, 2014 7:38 pm

Again, I have been asked for a gifting letter ... Here is one that I found in the archives.  I know there are more one cares to search GIFTING LETTERS in the SEARCH box above

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Gifting Letter Empty Re: Gifting Letter

Post by livingintheloop69 on Mon Dec 08, 2014 12:20 pm

I personally think gift letters and receipts and that stuff are kind of overhyped but wouldn't it be easier just to do a little generic bill of sale form offthe internet insteadofcalling it a gift letter? I don't know if IRS treatsthem any differently but just seems like it would be easier and less complicated to do a billl of sale between two people than a gift letter

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Post by Terbo56 on Mon Dec 08, 2014 12:26 pm

You DO NOT need a gifting letter- This will be a currency exchange, you can give it to whomever you wish-You don't need a gifting letter when you send a relative a big monetary gift at a birthday, do you? Same thing- You do not need any of this stuff- Quit listening to these guru idiots- We went through this same shit 2 years ago, and here it is again-
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Post by livingintheloop69 on Mon Dec 08, 2014 2:47 pm

@terbo56 wrote:You DO NOT need a gifting letter- This will be a currency exchange, you can give it to whomever you wish-You don't need a gifting letter when you send a relative a big monetary gift at a birthday, do you? Same thing- You do not need any of this stuff- Quit listening to these guru idiots- We went through this same shit 2 years ago, and here it is again-
I always thought the gift letters and receipts was Guru BS. Though I believe you are correct that a bank woudn't require a receipt to buy our Dinar, the IRS guidelines for how currency gains are taxed is pretty clear its either a short or long term capital gain so from that perspective if you would like to be taxed at a lower tax rate of a long term capital gain vs the higher tax rate of a short term capital gain it would probably help to have some documentation showing when you got this dinar.

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Post by BritishBulldog on Mon Dec 08, 2014 5:57 pm

Why would they need a receipt to exchange?  I can't remember ever being asked for a receipt when doing currency exchanges. I do anywhere from 3-5 trips out of the US a year...I've exchanged at banks and currency exchange places in and out of airports.
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Post by Kevind53 on Mon Dec 08, 2014 6:20 pm

Actually the only actual mention of currency exchanges I have seen in the IRS code would seem to indicate that any exchange with a profit of over $200 should be considered regular income. You may be make a case for capital gains since it was purchased as an investment, but I would recommend having a sharp tax layer on your side before you try.

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Post by livingintheloop69 on Mon Dec 08, 2014 8:40 pm

Numbers are accounting are my weakness so I won't even bother trying to make sense of this but maybe someone else can...

The general rule with regard to the U.S. tax treatment of gains or losses from exchanging U.S. currency for non U.S. currency (and back) is that the gain or loss on the currency exchange will now be taxed the same as the underlying transaction. The Taxpayer’s Relief Act of 1997 included a provision [Act Section 1104(a)] that included some changes, which are included in the following explanation.
 
Where there are currency gains or losses in connection with a trade or business or with the management or administration of investment assets, the gain is treated as an ordinary gain (rather than as a capital gain) and any loss is generally treated as an expense.
 
Where currency gains or losses are incurred in connection with the purchase of an investment, the gain or loss on the currency change on realization (usually from selling) is a capital gain or loss and is included as part of the total capital gain or loss on the investment.
 
Currency gains of $200 or less that arise from personal transactions (not for investment or business) are not taxable, but any personal currency losses are not deductible. A personal transaction includes any gain or loss arising from travel even if the travel is business related. Any currency gains in excess of $200 per transaction (per trip or per purchase) are treated as a capital gain. Losses on currency exchanges for business travel also appear to be non-deductible.
The primary source of information on the tax treatment of currency gains or losses is IRC Section 988.
 
Tax Treatment from Various Situations
A number of my subscribers have presented me with the question of whether certain gains and losses on foreign investments are capital gains and losses and whether any net gains would be eligible for the 15% maximum tax on long term capital gains, if the holding period requirements are satisfied.
 
To answer this question, it’s necessary to differentiate between different methods of acquiring an investment position in a foreign investment. The following is a non-technical interpretation of the rules in each of these situations.
 
1. The investor may purchase a foreign currency in exchange for U.S. dollars and hold the foreign currency as a capital asset. Any gain or loss would be a capital gain or loss.
 
2. The investor may purchase an indirect position in a foreign currency through the purchase of futures contracts, forward contracts, options or similar instruments, but the purchase is denominated in US dollars. Any gain on an unhedged position would be a capital gain or loss. Where the position involves the use of a hedge that meets the definition of a “straddle’ transaction under IRC 1092, the unrealized gain or loss would be recognized as of the end of the tax year.
 
3. The investor may acquire a debt obligation denominated in a foreign currency. Unless the debt obligation is acquired in connection with a trade or business or an activity constituting the management of investments, any gain or loss will be treated as a capital gain or loss – subject to the provisions of the original issue discount rules. If the debt obligation is acquired in connection with a trade or business or arises from the management of investments (IRC 212) any gain or loss attributable to the conversion of the debt obligation into US dollars would be ordinary income or loss.
 
4. The investor may acquire an interest in foreign currencies through a trade or business (partnership or proprietorship) conducted in a foreign currency. To the extent that such interests are denominated in a non-functional (foreign) currency, any gain or loss on conversion of the currency to the US dollar would be an ordinary gain or loss.
 
5. The investor may purchase foreign stocks of publicly held operating corporations with U.S. dollars but the stocks are denominated in a foreign currency. Thus, part of the gain or loss on the foreign stock is derived from the change in currency values while holding the stock and part of the gain or loss is derived from changes in the dollar value of the underlying stock itself. To the extent that the stocks are purchased as investments, the entire gain or loss would be a capital gain or loss – subject to the CFC and PFIC rules.
 
To the extent that any investments in the form of currencies or debt obligations are acquired in connection with the operation of a trade or business (or in connection with expenses incurred in the management of investments) and are denominated in a foreign currency, any gains or losses arising from conversion of the investments or debt obligations back to the US dollar would be ordinary gains or losses.
 
6. The investor may purchase the shares of a controlled foreign corporation (CFC) and may be (A) an investor with less than a 10% interest in the corporation or may be (B) an investor with an interest of 10% or more of the controlled foreign corporation’s stock.
 
Assuming the CFC is not also a PFIC (see below), the investor who owns less than a 10% interest in the CFC would not be subject to tax on the current income of the corporation. Any distributions from the CFC would be taxed as dividends. Any gain or loss on the sale of the stock in the CFC would be a capital gain or loss.
 
If the shareholder in the CFC owns 10% or more of the stock of the CFC, then that shareholder must report as current income, his or her pro-rata share of the “sub-part F” income of the CFC. Generally, that would include any passive investment income and certain other kinds of income as defined in IRC sections 951 through 954. Generally, “sub-part F income” does not include income from the operation of a business outside the US. If the foreign corporation has any US source income from doing business in the US, it will be required to file a tax return and pay corporate income taxes on that US source income. That income is therefore not treated as “sub-part F income” that is subject to inclusion in the tax returns of the US shareholders of the CFC.
 
7. The investor may purchase shares of a passive foreign investment company (mutual fund), which may be (A) a “qualified electing fund” or (B) a non-qualified fund.
 
For a qualified electing fund, the taxpayer will report his or her share of the current income of the PFIC in a manner similar to the shareholders of a US mutual fund.
 
If the PFIC is not a qualified electing fund, the US shareholder will be taxed on any distributions from the fund when they are received. Distributions of current earnings of the PFIC will be taxed at the shareholder’s regular tax rates. Distributions of accumulated income of the PFIC from previous years will be subject to tax at the highest ordinary income tax rate – which is presently 36%. (It’s not clear whether the 10-% surtax for taxable income in excess of $250,000 is also applicable to such distributions.) In addition, the shareholder will be required to pay interest on the deferred distribution.

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Post by Kevind53 on Mon Dec 08, 2014 10:25 pm

It seems to support the position that it could be taken as a capital gain, short or long term. Not sure if you can just say you purchased it as an investment or if you have to show proof.... Like I said ... make sure you have a sharp Tax Attorney...

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