TRUST INFORMATION:
Before I dive into any information concerning opening a trust or trust administration, remember that I am just telling you what I plan to do and not giving any advice whatsoever. I am not an attorney, a trust or tax attorney. I am not a certified financial advisor nor any of these like professional disciplines. For my personal use, I have done extensive research on trusts but even with this I will still consult a trust attorney to set up the trust and to help me manage it. Having some knowledge of trusts only helps me talk intelligently to the legal professionals and understand somewhat of what they tell me.
There are two kinds of trusts that I will be using. They include the Simple Trust and the Complex Segregated Assets Trust. I will be using both of them based on the type of asset I wish to put in the trust and what I intend to so with the asset. In some cases the asset is money and in other cases it is property or cars. I have already written a Living Will Trust for the ease of transfer of property upon our deaths.
A key note is to remember you DO NOT have to have a trust to exchange your dinar at the bank or any currency for that matter.
You can visit my TRUST WORKSHOP in my blog for more information on trusts. This information is just an overview and familiarization with terms used in working with trusts. You should always contact a specialized trust attorney to select and develop a trust that is right for your personal objectives as to how to protect and handle your assets.
WILL YOU BE TAXED ON YOUR EXCHANGE OF CURRENCY?
This is another one of those questions that keeps popping up. I will tell you I have researched this also and there are two sources I can reference to help get some information on this area of concern. You are welcome to go read the information for yourself and then determine for yourself. If I were you I would definitely take this information to a tax attorney for guidance and maybe call the IRS yourself to get a definite answer. For now, it is still skeptical what the taxes will be and how they will be handled on the Iraqi dinar exchange. We have not gotten any definite ruling by the IRS nor will we probably get one. If in doubt, be ready to file and pay taxes.
IRS Foreign currency and currency exchange rates | Internal Revenue Service (irs.gov)
If the value of foreign currency changes from when you acquire it to when you dispose of it (e.g., converting it back to U.S. dollars), you may have a gain or loss. Generally, gains on appreciated currency are taxable at ordinary income rates, not as capital gains.
THE “VACATION” EXCEPTION
This exception is a good starting point, since it applies to many people. If you hold a foreign currency for personal purposes, such as returned from a vacation trip or business trip and have left over foreign currency you did not use while abroad, and you incur a loss of any amount, or your gain is less than $200, there is no tax due on the gain or a deduction for the loss.
How does this vacation exception apply to the Iraq dinar exchange?
Some issues to think about and bring to your tax attorney.
- Your gain will be much more than the $200 exception in most cases
- You are not returning from a vacation or business trip
- Do we consider this exchange from an investment or a casual exchange from a hobby or trip since we did buy large sums of it and held on to it for so long?
- Are there any “special” exceptions to taxes based on State Dept policy towards Iraq and currency exchanges? See below link. Scroll down to Section 6. This might be what we are looking for.
- https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/
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