Insight On Donating Dinar
The following was sent to me by one of my teams of professionals who also hold dinar. It is a blanket summary based upon frequently asked questions concerning donating dinar, business entities, etc.
Hopefully is sheds some light for those working hard to prepare for taxes and charitable giving after rv.
This is also added to the “Taxes Q&A” section.
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DONATING DINAR:
ASSUMING CAPITAL GAIN PROPERTY TREATMENT BY THE IRS:
Short-term Capital Gain Property: The contribution deduction allowed for charitable gifts of appreciated short-term capital gain property (i.e., capital assets the taxpayer has held for 12 months or less) is limited to the taxpayer’s basis in the property (basis is equal to the purchase price of the asset)[IRC Sec. 170(e)(1)(A)]. This rule applies regardless of the type of charity to which the property is contributed
Sub-chapter S corporations and multi-member LLC’s are “flow through entities”. This means that income from the entity flows through to the personal tax returns of of the shareholders or members, respectively. In other words, these entities themselves pay no tax. A capital gain, for example, would flow through from the S corporation or LLC to the shareholder or members personal tax return.
There are specific rules regarding the treatment of charitable contributions of appreciated property from partnerships (which is how multi-member LLC’s are taxed) and S corporations that affect the members’ or shareholders’ basis in the entity.
A single member LLC is a disregarded entity (unless it elects to be taxed as an S corporation for tax purposes) and its activity is reported on the personal tax return.
Generally speaking, property transferred to a corporation during incorporation or to a partnership retains the same holding period as in the hands of the contributing shareholder or partner and the basis is the same as it was in the hands of the contributing partner or shareholder. No gain is recognized on the transfer.
However, this does not apply to a partnership that is an investment company (more than 80% of the assets are portfolio-type investments). With an investment company partnership, gain or loss, if any, is recognized at the time of the contribution of the property to the partnership.
You could potentially deduct in a business entity the ordinary and necessary business expenses related your dinar investment that you might not otherwise be able to deduct. Finally, there may be valid and compelling legal reasons to hold assets in such an entity, but I am not qualified to comment on what those reasons might be.
TAX MITIGATION
There are investments available only to accredited investors and advanced tax planning techniques and strategies that can be used to reduce the tax burden. These are best addressed on an individual basis and should be integrated with your overall financial and estate plan.
DISCLAIMER
While the authors have used their best efforts in preparing the above information, they make no representations or warranties with respect its accuracy or completeness and disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by the authors. The advice and strategies contained herein may not be suitable for your particular situation. You must perform your own research with pertinent tax authorities to address specific situations. The authors shall not be liable for any loss of profit or any commercial damages, including but not limited to special, incidental, consequential, or other damages.
and it cannot be used by a taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code
or applicable state or local tax law provisions.
Cherilynn Stone
www.dinarinfo.net
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February 17th, 2010 at 8:40 am
donate my dinar? when it rv’s ill consider donating to my financial portfolio, but until then, im not looking to donate anything especially my dinars
February 17th, 2010 at 2:05 pm
Are there tax breaks for the investment when you are in a business partnership?
I also have heard you do not have to pay capital gain taxes if you re-invest in land within the first year of receiving “the investment”. Is this true?
February 17th, 2010 at 8:56 pm
Although I will make a clear disclaimer that I am in no way a financial advisor or tax expert, my suggestion for donating to a non-profit organization, would be to donate it in the dinar currency itself. My understanding is that nonprofits, such as churches, etc should not pay any taxes on it, let alone have to worry about waiting to avoid the 35% capital gains for short term investments. It would be the same to them as any other item donated (car, land, etc) and they could turn it in for the RV rate when that happens. Why would you want to exchange it for US $, be taxed on it, and then donate it? Just donate the dinar itself. There is a limit as to how much you can receive as tax deduction for charitable giving, so I think you would still end up paying taxes on part of what you donated if you went over the allowed limit. If you don’t cash it in (but give it as dinar) they can’t charge you tax on it.
Just a thought. If someone with professional knowledge on this can correct me I’d appreciate, because right now that’s what we are doing with ours.
February 17th, 2010 at 10:45 pm
How can we be talking about taxes and donations,when we don’t even know if this investment is working or not.they even change the currency too.
February 17th, 2010 at 10:47 pm
I ment may change the currency too