RE: Are All ICOs Now Officially "Securities" According to the SEC?
I was just commenting on another blog post about this. One consequence which is also wrapped up in this ruling is how it will impact Section 1031 Like-Kind Propert Exchange claims reported for US Income Tax purposes.
Essentially by designating these tokens as securities or a financial instrument, it would trigger the exceptions clause in section 1031, which kills the ability to defer capital gains tax. Instead of remitting when you move into fiat, every transaction would have to be reported and tax paid in the year the tax event occurred.
Regarding the issue of those participating in ICOs, the intended target of that message is not the consumer. I think it's intended for the tech companies conducting fundraising via ICO which is bullshit. Blockchain tech is the future of tech. Prepare for a mass exodus of tech companies from the US. Way to kill an entire industry SEC. you could have rule it fell under the Crowdfunding exemption in the 2012 JOBS Act.
This is why we can't have nice things.
Ugh. I hadn't even considered the capital gains implications.
Bah. I'm going to poor myself a glass of wine.
The day that cryptos or exchanges are forced to produce statements to all of their clients, is the day they all go out of business. The billions of transactions that have already occurred will take a lifetime to report on. Egad.
@wakeupsheeps there is a case to be made they should have been providing information reports. Consider that the IRS already provided guidance that digital currencies would be taxed as property, so technically crypto to crypto exchanges such as Poloniex are facilitating barter transactions.
At a minimum they would have been required to provide Form 1099-Bs. TIGTA raked the IRS over the coals for lack of enforcement last September towards cryptocurrency tax evasion issues. The result was one month later, Coinbase got hit with a historic and sweeping "John Doe" summons, which they limited the scope of in an agreement with Coinbase. My guess would be Kraken and Poloniex are next on the enforcement radar.
I appreciate the info, saves me an investigation. It seemed rather odd that government hadn't already stepped into the crypto space. Many untaxed transactions have come and gone.
If I remember correctly, there were about <1,000 people who declared capital gains taxes taken out of coinbase last year. Policy changes afoot.
When the implication of this hit me, I went straight for the whisky. Now is not the time for training wheels.