exchanging Dinar and Dong

If exchanging the Dong will increase your “ordinary income”, then you will be boosted up into the highest tax bracket (whether Long Term or Short Term) on the exchange of the Dinar. That means you could pay 39.6% federal plus 3.8% Obamacare tax in addition to your state income tax. So I suggest you exchange Dinar for yourself the first tax year and either give Dong as a gift to others or wait to exchange Dong the following tax year.

If you have Dinar and it is taxed as Capital Gains, it will be taxed according to your tax bracket and whether LT or ST. First, you will want to hold Dinar so it is Long Term (366 days after purchase) and keep your purchase receipts for tax filing. You will be required to file estimated quarterly tax payments for the current tax year after the exchange. The key will be to reduce current year “ordinary income” and maximize your deductions during the year that you exchange Dinar so that your tax bracket is 0% or 15% and the following year you will get back most, if not all, of the estimated taxes paid.

You could reduce income by:
    Quitting your job or business
    Taking an unpaid leave of absence until year end
    Postponing any bonuses until the following year
    Keeping money in non-interest bearing accounts
    Holding any capital gains (winners) until the following year.
    Postponing retirement income
    Postponing social security income

You could maximize your expenses by doing the following for you, your spouse, and your dependents in the same year as the exchange;
    Tithe to your church and give to charity (up to 100% of income below $250,000)
    Contribute full amount to a traditional deductible (not Roth) IRA, if working 
    Contribute maximum amount (16%) to 401K plan, if working
    Take out a home equity loan to remodel your home (for deductible interest) 
    Wait until Dec 20th to payoff your home to maximize interest deduction
    Buy and finance a second home for deductible interest (2 homes are deductible)
    I    install a solar energy system or wind turbine on your personal real estate and claim a tax credit of up to 30% of the installation cost
    Buy rental property and start fixing it up but don’t rent it out until Jan 1st
    Claim deduction for “points” and prepaid interest on all new home purchases
    Pay state tax for current year by Dec 20th even though not due until next April
    Pay all real estate tax by Dec 20th even though not due until next April 
    Pay tuition by Dec 20th for the whole year (if it’s a deductible expense)
    Pay medical premiums by Dec 20th even though not due until the following year
    Pay all medical out of pocket expenses by Dec 20th
    Claim as many dependents as you legally can (other relatives you support)
    Have all dental work done for whole family and pay this year (deduction)
    Have a thorough vision checkup for whole family and pay this year (deduction)
    Order a year’s worth of contact lenses and pay this year
    Order two or more pair of glasses and pay this year
    Have elective surgery done and pay this year
    Buy new cars, a boat, an RV, etc and deduct state sales tax paid
    Do not trade in your old cars, donate them to charity for a write-off
    Arrange your business to “lose money” or break even so it’s a write-off
    If you move for work, save receipts and claim moving expense deduction
    Sell all stocks that have a capital loss by Dec 20th but hold winners until next year

Expect to be audited!  Keep ALL cancelled checks and receipts for every single deduction and contribution. 

Work with your CPA or financial planner throughout the year to fine tune your deductions to reduce your marginal tax rate to 15%.

Note: If you live in a state with state income tax (such as Calif) and the revaluation happens beforeMay 15th, consider buying a new home in a state that does not have state income tax (such as Washington, Nevada, Texas, Florida). Check the residency requirement for each state. Close escrow and move there before June 30th. Set up full time residency there (register to vote, change registration on all cars, work there, live there, send kids to school there) and plan to stay there for two full years. Then when you exchange the Dong in the year following the exchange of the Dinar, you may be able to save the amount of state tax that you would have been taxed.