Taxpayer purchased foreign currency as an investment. There is no sale or gain currently, only purchase. Am I correct that there is no need to document this on TP return? No sale, loss or gain as of yet.
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This is a scam which has been going around in churches for years. They can probably document the worthlessness of the "investment" by a simple visit to Snopes, because they aren't going to hit the big jackpot they were promised."The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith -
John, thank you so much! I searched foreign currency prior to posting, but then narrowed it to Iraqi Dinar, and found a thread that said exactly what you stated. Thank you for your expertise. I will have a very sad taxpayer.
He cannot claim a capital loss until he sells, correct?Comment
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I do believe he has
a capital loss that would be deductible now and or now and in the future under the ordinary rules for same. Now if original poster can help him find a financial adviser who is both competent and honest that would be a great service to the taxpayer and cement the relationship between taxpayer and tax professional.Comment
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Couldn't help wondering how the current political/economic meltdown in Iraq is affecting those scam artists still peddling Iraqi dinars. I'm sure they will figure out a way to spin this as a positive development and entice more suckers into their web."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Currencies aren't tools for investment. They are tools for speculation.Comment
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I agree.
That's why I avoid using the term "Investment" in a serious manner only in very specific circumstances."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Well don't I feel foolish
I invested my life savings in the Dinar AND Incan matrimonial head masks!!! I've been duped!
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Another one!!!
Just had another client come in and tell me he invested in a large amount of Iraqi Dinar! Will this never end? I won't give too many details but there was no dissuading him. I should have asked him to Google "snake oil salesmen".
Three scenarios play out in my mind regarding the "re-valuation" of this worthless currency:
1. America (Babylon) falls, the economy is destroyed and everyone's currency (including the Dinar) is worthless.
2. Cashless society, one govt, one currency and Dinar is worthless.
3. Great war breaks out (WWIII) in the Middle East (yet to come) rendering all currencies in this region (including the Dinar) worthless.
Lose, lose, lose; doesn't sound too promising. AND, if the Dinar does revalue to be "3 times greater than the US Dollar" does anyone realize that this means our economy would be in a catastrophic state? Would we even be allowed to trade in currency at that point without the Govt. confiscating it? Ridiculous!Circular 230 Disclosure:
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That's like the occasional client who calls to day they are buying & holding gold (bars, bullion, coins, etc).
When I ask them why, they tell me it's a hedge against the economy going into deep depression and the dollar becoming worthless.
I always tell them the same thing:
"If that happens, the only metal with any value will be LEAD!""The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Exactly!
People don't remember the Govt. recalling these "precious" metal, ordered by Roosevelt (a fine President).
At any moment the Govt. could do that or they could "find" a huge stash of "undiscovered gold" and cause the prices to drop.
I invested quite a bit in lead. I bought 22 rounds at $13 a box a few years ago; 2 years later you can't find them for cheaper than $50 a box. How's that for speculation? A 385% increase in price!Circular 230 Disclosure:
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As JohnH mentioned this is a scam that must be stopped. Two of my clients are trapped in this scheme. One lady has a closet full of Iraq Dinars in physical form (actual currency notes). Until she actually sells it, I don't think she can take the loss and based on what her financial adviser is telling her, she is going to hold it until her dreams come true as promised! I don't think I will be around to see that!Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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I had an elderly client who went into a nursing home and her son, who was POA, invested her money in this scheme, losing it all. Not only that, he convinced his brother to invest in it too. When the $$$ ran out, she was moved back into her home, and died within 3 mos.Comment
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Disgusting
I am all for investing wisely and seeking profit, etc, but what possesses a person (besides greed) to even think that a scheme like this would work out well??
"If it seems too good to be true...."
Everything that woman worked for, gone in an instant. I have had a few clients like yours Burke, it is sickening. AND, usually the son/daughter that ruined the parents' life savings are nonchalant about it! Like, "Eh, what was the old lady gonna spend the money on anyway, nursing home fees and Depends!!!?" Unbelievable!Circular 230 Disclosure:
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I've seen (as have many of us), people take unbelievably foolish risks with money belonging to relatives. Risks they would never consider taking with their own money. And in many cases, all they did was squander their own inheritance. Just how stupid and/or immoral does one have to be in order to do this sort of thing?"The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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