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Neno's Place Established in 2006 as a Community of Reality


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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

Many Topics Including The Oldest Dinar Community. Copyright © 2006-2020


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Bama Diva
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Currency Exchange Taxation

Bama Diva
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Currency Exchange Taxation - Page 2 Empty Currency Exchange Taxation

Post by Bama Diva Tue 02 Jul 2013, 9:22 pm

First topic message reminder :

There was an interesting conversation in the chat room earlier today regarding how   currency exchange is taxes. I began some research tonight and will post some articles that I've found that seems to address the subject. I have no idea what the IRS will rule, but there is some interesting reading to be had on the subject. 

An Introduction to Currency Taxation
Posted by IWC on September 28, 2012
A basic understanding of currency exchange principles is critical for U.S. expatriates, international business people, and global investors.
U.S. tax liability is determined in U.S. dollars. Because currency values change relative to one another, many tax issues arise when currencies are bought and sold. Last month, we discussed general factors affecting relative currency values and currency exchange rates. This month we will look at general questions of currency exchange taxation:


  • If foreign currency is purchased and the value of that currency goes up prior to sale (you get more dollars back than you started with), is that gain taxed as a capital gain or as ordinary income?
  • If foreign earned income is exchanged for dollars (no gain on invested capital), how is that taxed? And, what if foreign earned-income is never exchanged for dollars, how is tax computed in that case?


[b style="padding: 0px; margin: 0px;"]Gain on Sale of Currency: Ordinary Income[/b]
Long-term capital gains income is usually taxed at a lower rate than ordinary income (which is taxed at an individual’s marginal tax rate). When foreign currency is purchased and later disposed of, as an investment or as a hedge, the gain or loss on the disposition (sale) of that foreign currency will be taxed as ordinary income. This is distinct from the purchase and later sale of other investment assets, which typically get capital gains treatment. The reason for ordinary income treatment of currency transactions is that Congress views currency fluctuations as tied to interest rate changes. Thus, the fluctuations are taxed as if they were interest earned, as ordinary income.



[b style="padding: 0px; margin: 0px;"]Personal Currency Transactions[/b]
Personal currency transactions (those not for business or investment purposes, as for a vacation) receive distinct tax treatment. Currency gains or losses less than $200 are de minimis and have no tax effect. If the gain is higher, then it is taxable as a capital gain (not as ordinary income, as above). Losses on currency exchanges from non-profit-seeking endeavors are normally not deductible. Similarly, a currency gain on the sale of a personal residence (sold in foreign currency) in a foreign country is taxable, but a currency loss on the repayment of the mortgage would not be deductible.

http://www.integratedwealth.com/an-introduction-to-currency-taxation/


Last edited by Bama Diva on Tue 02 Jul 2013, 9:24 pm; edited 1 time in total (Reason for editing : added info)
zimi31
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Post by zimi31 Wed 03 Jul 2013, 5:56 am

duck2000 wrote:being as this was clearly set up to be an investment and not just a currency exchange rate and gain.. capital gains does apply!


From everything I've read including this morning threads, it appears as you say to be capital gains...but something inside of me says... not so fast! Can't believe the powers that be won't try to change it and get as much as they possibly can, sure hope I'm wrong..thanks Duck!!!
duck2000
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Post by duck2000 Wed 03 Jul 2013, 7:00 am

one must understand that this is a new curreny .. a new country .. the old currency which consited of saddams and swiss currency was destroyed giving it a new currency and a new rate! this was the purpose for the investment not as just a currency exchange becasue for all intents and purposes this wasnt here except for the countries name !
Bama Diva
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Post by Bama Diva Wed 03 Jul 2013, 7:10 am

duck2000 wrote:one must understand that this is a new curreny .. a new country .. the old currency which consited of saddams and swiss currency was destroyed giving it a new currency and a new rate! this was the purpose for the investment not as just a currency exchange becasue for all intents and purposes this wasnt here except for the countries name !

 I want you to be right, believe me, and pray you are. I just started looking for information yesterday after a conversation in the chat room whereby a member had spoken to a tax attorney that day who was supposedly very familiar with the dinar investment.
duck2000
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Post by duck2000 Wed 03 Jul 2013, 7:13 am

2) The CPA is vested with all executive, legislative and judicial authority necessary

to achieve its objectives, to be exercised under relevant U.N. Security Council

resolutions, including Resolution 1483 (2003), and the laws and usages of war.

This authority shall be exercised by the CPA Administrator.
 Pursuant
to my authority as Administrator of the Coalition Provisional Authority (CPA),
relevant U.N. Security Council resolutions, including Resolution 1483 (2003), and the

laws and usages of war,

http://www.iraqcoalition.org/regulations/20030516_CPAREG_1_The_Coalition_Provisional_Authority_.pdf


duck2000
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Post by duck2000 Wed 03 Jul 2013, 7:15 am

Bama Diva wrote:

 I want you to be right, believe me, and pray you are. I just started looking for information yesterday after a conversation in the chat room whereby a member had spoken to a tax attorney that day who was supposedly very familiar with the dinar investment.

 if the tax attoreny was up to date on the CURRENT facts as ive laid out this wouldnt be an issue but ask if he is going on ANY other currency exchange and you will find he is .. this is quiet different!
Bama Diva
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Post by Bama Diva Wed 03 Jul 2013, 7:23 am

duck2000 wrote:

 if the tax attoreny was up to date on the CURRENT facts as ive laid out this wouldnt be an issue but ask if he is going on ANY other currency exchange and you will find he is .. this is quiet different!

 Thank you!!  I was sick last night after reading information regarding taxes. I don't want to have to pay one dime more than I have to as others also feel. So, I will make sure to keep all of these links and info you have provided Duck so I will have them when the times come to pay the taxes.
zimi31
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Post by zimi31 Wed 03 Jul 2013, 7:40 am


Thanks Bama & Duck...appreciate all the info!!!
rocky
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Post by rocky Wed 03 Jul 2013, 7:50 am

Other than buying more dinar and cashing in what I have this is the most important info for me to keep what I have or will have, thank you Thanks Bama & Duck...appreciate all the info!!!
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Post by wciappetta Wed 03 Jul 2013, 8:14 am

Bama Diva wrote:There was an interesting conversation in the chat room earlier today regarding how   currency exchange is taxes. I began some research tonight and will post some articles that I've found that seems to address the subject. I have no idea what the IRS will rule, but there is some interesting reading to be had on the subject. 

An Introduction to Currency Taxation
Posted by IWC on September 28, 2012
A basic understanding of currency exchange principles is critical for U.S. expatriates, international business people, and global investors.
U.S. tax liability is determined in U.S. dollars. Because currency values change relative to one another, many tax issues arise when currencies are bought and sold. Last month, we discussed general factors affecting relative currency values and currency exchange rates. This month we will look at general questions of currency exchange taxation:


  • If foreign currency is purchased and the value of that currency goes up prior to sale (you get more dollars back than you started with), is that gain taxed as a capital gain or as ordinary income?
  • If foreign earned income is exchanged for dollars (no gain on invested capital), how is that taxed? And, what if foreign earned-income is never exchanged for dollars, how is tax computed in that case?


[b style="padding: 0px; margin: 0px;"]Gain on Sale of Currency: Ordinary Income[/b]
Long-term capital gains income is usually taxed at a lower rate than ordinary income (which is taxed at an individual’s marginal tax rate). When foreign currency is purchased and later disposed of, as an investment or as a hedge, the gain or loss on the disposition (sale) of that foreign currency will be taxed as ordinary income. This is distinct from the purchase and later sale of other investment assets, which typically get capital gains treatment. The reason for ordinary income treatment of currency transactions is that Congress views currency fluctuations as tied to interest rate changes. Thus, the fluctuations are taxed as if they were interest earned, as ordinary income.



[b style="padding: 0px; margin: 0px;"]Personal Currency Transactions[/b]
Personal currency transactions (those not for business or investment purposes, as for a vacation) receive distinct tax treatment. Currency gains or losses less than $200 are de minimis and have no tax effect. If the gain is higher, then it is taxable as a capital gain (not as ordinary income, as above). Losses on currency exchanges from non-profit-seeking endeavors are normally not deductible. Similarly, a currency gain on the sale of a personal residence (sold in foreign currency) in a foreign country is taxable, but a currency loss on the repayment of the mortgage would not be deductible.

http://www.integratedwealth.com/an-introduction-to-currency-taxation/

 I rather take the IRS declaration rather than someone with a blog rendering an opinion whether they are a CPA or not. I know many CPA's and most of them need instruction half of them do their job poorly in fact.....So here is the IRS comment on the subject and it calls it capital gains and here is the specific verbiage and this was verified with the IRS... If anyone wants to pay extra the IRS will gladly take it .... If you have this currency less than 12 months it's then ordinary income. More than 12 months the long term capital gains rule applies....


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 than $200. If the gain is more than $200, report it as a capital gain.

http://www.irs.gov/publications/p525/ar02.html#en_US_2012_publink1000229342


_________________
For I know the thoughts that I think toward you, saith the LORD, thoughts of peace, and not of evil, to give you an expected end. Then shall ye call upon me, and ye shall go and pray unto me, and I will hearken unto you. And ye shall seek me, and find me, when ye shall search for me with all your heart.
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Post by rocky Wed 03 Jul 2013, 8:18 am

Thanks Ward, good info always

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