Dinar Daily
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Get Daily Updates of the NEWS & GURUS in your EMAIL
CHECK YOUR EMAIL for VERIFICATION

Enter your email address:

Is Currency Exchange Capital Gains? IRS says NO?!? DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Is Currency Exchange Capital Gains? IRS says NO?!?

Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Is Currency Exchange Capital Gains? IRS says NO?!?

Post by TheBeav on Fri Jul 15, 2011 6:24 am

Someone emailed this to me. I am officially confused, bewildered and perplexed!!!!!!!!!

What say you members who are "in the know"???????????




This was sent by email. Source unknown. TAX POST: Spent almost 3 hours with IRS today and here in a nutshell what they told me, coming from their Law Dept on Currency. Currency is not considered an investment. It is NOT a Capital Gain because it is not the sale of anything. Currency Exchange is treated as an exchange and not the sale of an asset. You would have to pay taxes on currency if purchased through an exchange such as the Forex, but currency is not treated like a bond, stock etc. the only way you could be taxed on currency is if congress passes a NEW LAW to collect taxes on this event. This was told to me by an IRS Law Dept Lawyer. I would like someone out there to show me proof or where in the IRS Tax Code where Currency is considered a capital gain. The IRS sure as heck could not show me or tell me that it was. Where is everyone getting this information that currency is a capital gain?
TheBeav
TheBeav
Elite Member
Elite Member

Posts : 272
Join date : 2011-06-18

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Post from another site regarding taxes on foriegn currency-

Post by topoftemountain on Fri Jul 15, 2011 7:09 am

* Site Member Email: Tax Info…
July 7th, 2011 01:17 pm · Posted in CHATS & POSTS (Iraqi Dinar Info), MEMBERS (Dinar & Iraq Insight)
DD,

I pray all is well with you and your family. I am so excited about our investment and the movement toward the final moments. I am a planner and wanted to share some information with you. As a level 2 tax specialist and preparer, I stay in touch with members of the IRS and must review new codes as they are made available to us. I have noticed a good deal of questions about the taxes and some even saying a 15% flat tax on this exchange.

First of all, these individuals need to talk to a tax lawyer if they do not know how to read tax publications.

Second, if they can understand these publications then they need to start reading up on this. Publication 550, page 40, paragraph titled “Foreign Currency Contract” is the place to start. I have been informed by the IRS that this will not be Capital Gains and will not be taxed as such. Anyone reporting this on Schedule D with their annual tax return will have a 99.9% chance of being audited. *scary thought to some*

This exchange will be treated as ‘ordinary income’ for tax purposes as it is a direct exchange from one currency to another. IRS agent stated “it is not a capital gain as would be with stocks or other investments as currency exchanges have never been taxed as an investment but instead as ordinary income.”

This is in no way or in any part tax advice, just pointing people in the right direction. I would hate to see anyone who has been in this lose what they have gained. This would be facts as it is in the IRS publication, this is no rumor. LOL

Take care and may God bless you and your family abundantly.

Keeping the faith,

Michael


topoftemountain
Active Member
Active Member

Posts : 47
Join date : 2011-06-18
Location : Southwest Virginia

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by Pitterpatter on Fri Jul 15, 2011 7:28 am

TopoftheMt- w/0 elaboration, I am sad to say that yours is the same conclusion my tax attorney arrived at, although we are hopeful for a more favorable ruling, post -RV. Our plan is, basically, to pay 35% (ordinary income), so we don't have to look over our shoulders for IRS, then basically "appeal" this determination and get a refund if we can convince them we purchased basically worthless IQD (not tradable and not useable anywhe but inside Iraq) in sufficiently large amounts that it could have been for no othr purpose but as an investment. Thereof ore, just like any other investment vehicle, under these rather unique circumstances, this shold be a capital gain.

Pitterpatter
New Member
New Member

Posts : 16
Join date : 2011-06-18

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by topoftemountain on Fri Jul 15, 2011 7:41 am

Thanks Pitterpatter,
Please note it is a post found on another site. I posted it for information purposes only. In this investment because there has never been anything like it before for the common man, there are many questions, many answers and many roads not yet traveled. The more information we sift through, the better prepared we will be. I will pay whatever is due in taxes so forward motion is constant. Thanks for the info, have a blessed day.

topoftemountain
Active Member
Active Member

Posts : 47
Join date : 2011-06-18
Location : Southwest Virginia

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by sparcky374 on Fri Jul 15, 2011 8:28 am

I didnt see the other posts but the 525 pdf atricle is pretty straight forward that it is considered capital gains. page 33, middles column under foreign currency.

sparcky374
New Member
New Member

Posts : 11
Join date : 2011-06-20
Age : 70
Location : Florida

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by hoosierbuster on Fri Jul 15, 2011 9:47 am

Never trust anything an IRS agent tells you (in any department, with any title). If they are willing to sign a document stating a their fact as law then you may have grounds to act upon their word. I suggest you read the code/publications, consult a qualified tax attorney who has this particular excperience, and then look for precedence in former cases or instances.

hoosierbuster
Active Member
Active Member

Posts : 59
Join date : 2011-06-18

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by Pitterpatter on Fri Jul 15, 2011 9:57 am

Sparcky374- what often appears "clear" gets very muddy when looking at court decisions interpretting what something means. I know from personal experience as a lawyer (not a tax attorney, although I employ a very good one) the law is what the courts say the law is, and their interpretation is often surprising. I hole you are correct, but it is undoubtedly the only prudent choice to consult a good tax attorney and/or CPA before proceeding. Tax law is complicated.

Pitterpatter
New Member
New Member

Posts : 16
Join date : 2011-06-18

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by RoseRedTyler on Fri Jul 15, 2011 10:37 am

Randy Koonze,' currency chatte'r is already planning a trip to Austin, Texas to the Tax Attny to apply and get a written decision on his windfall. He has told us he will let us know how that comes out. He recommended we all do the same for our own protection as all individuals have different circumstances. He recommended we see our own local tax attorney once he gets his so we will have the information and get an individual ruling before we do anything, including cashing

RoseRedTyler
Active Member
Active Member

Posts : 54
Join date : 2011-07-07
Location : Tyler, Texas

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by tomb22 on Fri Jul 15, 2011 11:26 am

Re: Taxes on our "investment"
The reference to IRS Pub 525 (2010) states as follows on page 33:  "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 then $200.  If gain is more then $200, report it as a capital gain."
 
The other reference was to IRS Pub 550 (2010), page 40.  That reference is talking about a "Foreign Currency Contract."  IMHO, we do not have a foreign currency contract which is something bought and sold on FOREX.  We "exchanged" our USD for IQD at the current rate.  We are planning to exchange it back to USD when it increases in value.  For me, that makes the pub 523 reference, the operable one.
 
However, that being said, the advice and comments that followed is good advice.    The GAO for years in their "IRS Audits" have indicated that when talking with the IRS, they are wrong in their numbers and in their statements concerning the law, rules, and regulations over 50% of the time!  Having been a paralegal since 1991 and having worked on a few IRS cases (just enough to be dangerous:)) I know for a fact that they do not follow their own rules.
 
--------------------------------------------------------------------------------
 
Never trust anything an IRS agent tells you (in any department, with any title). If they are willing to sign a document stating a their fact as law then you may have grounds to act upon their word. I suggest you read the code/publications, consult a qualified tax attorney who has this particular excperience, and then look for precedence in former cases or instances.  
 
--------------------------------------------------------------------------------
 
Sparcky374- what often appears "clear" gets very muddy when looking at court decisions interpretting what something means. I know from personal experience as a lawyer (not a tax attorney, although I employ a very good one) the law is what the courts say the law is, and their interpretation is often surprising. I hole you are correct, but it is undoubtedly the only prudent choice to consult a good tax attorney and/or CPA before proceeding. Tax law is complicated.

tomb22
Forum Friend
Forum Friend

Posts : 130
Join date : 2011-07-08

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty OOPS

Post by tomb22 on Fri Jul 15, 2011 11:36 am

Sorry, the reference to IRS Pub 523, was a typo, I meant the IRS Pub 525 (2010). Also, as newbie posting virgin, I did not show the great quotes correctly.
Will do better if there is a next time.

tomb22
Forum Friend
Forum Friend

Posts : 130
Join date : 2011-07-08

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by Ponee on Fri Mar 14, 2014 5:36 pm

PLease note, this is an ARCHIVED POST from a few years back that I am bumping up. Because of the ever flowing newbies into the dinar world, it never hurts to bring old informative topics back up for newbies to get answers and ask questions. Even now, we have different members with different thoughts and perspectives.

*****************
Ponee
Ponee
Admin
Admin

Posts : 37245
Join date : 2011-08-09

View user profile

Back to top Go down

Is Currency Exchange Capital Gains? IRS says NO?!? Empty Re: Is Currency Exchange Capital Gains? IRS says NO?!?

Post by catman on Sat Mar 15, 2014 4:14 am

Here is a little project for someone.  We are pretty much all aware of Publication 525, but IRS publications are NOT the law and sometimes have errors.  If you follow what a publication says and it is wrong, the error (and possible penalties and fines) are your responsibility.  The information in publications are supposed to be easy to understand guidelines based on the code.  Can anyone find the place in the Internal Revenue Code that is the basis for the paragraph in Pub. 525?  I haven't been able to find it.
catman
catman
VIP Member
VIP Member

Posts : 1085
Join date : 2012-04-28

View user profile

Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum