i have purchased iraqi dinars.currently i have over 10 million.the chatter is that iraq is very close to revaluing their currancy and investors predict a $4 reval,making this a $40 million payout.i have not held the currancy over a year,how can i get any favorible tax advantages to lower my liability
The gain on sale of the Iraqi Dinars is going to be taxed as ordinary income under §988 of the internal revenue code.
Thus the income is not taxed as capital gain which could potentially be taxed at 15% if the underlying property were held for greater than one year.
Ordinary income is taxed at your highest marginal tax rate. (i.e. the same tax rate as wages or rental income)
So there really isn't anything that you can do to lower your tax rate on gain on sale of foreign currency.
I hope I have provided the clarity you were looking for. Please let me know if you have any further questions.
US Taxation specialist.