Is it illegal to make a profit from the international exchange of money?
In other words I have US dollars and I sent money to a different country perhaps Mexico. My dollar is worth twice in Mexico so I get double the money I send. Now I exchange my Mexican money to dollars and I get a profit. I deposit the money that I sent to Mexico with the profit to the bank and I do the same thing over and over again. Would this be ilegal? If yes, how can I make this legal? Paying taxes ?
- SlickterpLv 71 month ago
You only make a profit if you change it back at a better rate. You don't get double the money. You get an equal amount of money. You may get 2 pesos say for your one dollar, but that is because a peso is worth half as much. The you trade in your 2 pesos and get one dollar back. Zero profit.
- MorningfoxLv 71 month ago
It is perfectly legal to profit from currency exchanges. But it is nearly impossible to make a profit. Your US dollar is not worth "twice" in Mexico.
US$ 1000, converts to Mex peso 21,800 (if you can find a good exchange)
Mex peso 21,800 converts to US$ 948 (again, if you can find a good exchange)
Net lost: $52.
About the only way to make a profit is to hold the pesos for a while, and hope that the exchange rate goes in your favor, while taking the risk that it goes against you.
And then there is all the extra tax paperwork ...
- 1 month ago
You start with dollars and exchange them to pesos. You then change them back to dollars. You finish up with less in dollars than you started with. The exchange agency that changes your money keeps a bit with each transaction to pay its staff and make a profit. If you want to make a profit from international exchange, start an exchange agency. Because the rate at which you change dollars into pesos can change, it is possible to make a profit by picking your moment, but you'd need to have a lot of money or any gains would be lost in exchange fees. Also, for every one making a profit, there's someone else making a loss - and guess what happens to beginners.
Generally speaking, you pay tax on your profits if you are a currency dealer intending to make a profit. If it's just a casual gain, it's not taxed.
- Ranchmom1Lv 71 month ago
You aren't making a profit. Your Mexican dollars are still worth half the US dollar when you exchange it back.