_(Dinar Recaps posts this for informational purposes only and RECOMMENDS that EVERYONE should hire a Professional Licensed Tax person for their own circumstances.)
Dear fellow Dinarians.
I am sending this to Dinarrecaps because I recently read where an attorney indicated that he felt there would be no tax on our investment. I respectfully disagree. I am not a “guru.” I am not a CPA or Tax Attorney. However, I have been a paralegal for attorneys and the public for over 20 years. I do research and prepare documents for them. They go to court and represent.
I have been in this investment for about a year now. During that time, I have read many stories about different ways the investment will be taxed. Most of them are wrong. Please don’t accept what I say as a fact, check it out for yourself. This will help you when you are talking to an alleged “professional.”
This is my opinion as to how it will work. In IRS Publication 525, page 33, under Foreign Currency Transactions it says, “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.”
Read More Link on Right
_Some folks have indicated that the answer is in IRS Publication 550 on page 40. Again, my opinion, I believe that section is for foreign currency dealers and/or folks that trade Forex contracts. We don’t have contracts. We have the dinar in our hot little hands. That is why I am going with the statement above in publication 525. And yes, I am going to use a CPA and/or a Tax Attorney but, they will have to convince me and show me the statute or publication that takes publication 525 out of the picture.
Some folks have stated that it will be a 15% flat tax. I believe it will be a capital gain as stated in publication 525, page 33. If it is capital gain, depending on how long you have had your dinar, it will be 15% (long term capital gain held over one year) or 35% (short term capital gain held under one year).
Here are the 2011 and 2012 Capital Gains Tax Rates – Short and Long Term
When you sell a capital asset like stocks or a home you own, the difference between the amount you sell it for and you paid for it (or cost basis) is classified as a capital gain or a capital loss. Capital gains and losses are further classified as long-term or short-term, depending on how long you hold the investment before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. Based on the duration of asset ownership and the tax filer’s personal tax rate, we can calculate their capital gains tax rate.
Short-term capital gains are taxed at ordinary income tax rates up to 35%. Long-term capital gains (assets held for more than one year) are taxed at 0%% for taxpayers in the 10% and 15% tax brackets and 15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets. The 0% tax rates for those in the 10% and 15% tax brackets was a special provision in the bush-era tax cuts which were extended to 2013.
Pub 525 clearly states it is Capital Gains. I think someone is trying to confuse people.