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RE: The 4% withdraw rule and why you may never need to completely cash out of Steemit
It is - to put it frankly -a shitshow. Nothing is certain and that's the concern. Yes, there would be a profit motive on the IRSs part i think to maintain value in these currencies and therefore not take on the most onorous interpretations of income here.
But at the same time the IRS has been for a long time an agent of societal norms and taxation as a form of behavioral penalty is always a real possibility.
But how this plays out is unknowable I'm just glad to have engaged with you on the topic and am trying to encourage people to at least consider and prepare for all eventualities. just because the worst case outcome does not seem sensible does not mean it should not be prepared for.
You have a point, and if my account on Steemit becomes worth beyond a certain threshold then I too will hire a CPA. Right now I don't have an account worth $1 million but I do think it is possible by the end of the year it's possible.
Even with a CPA, some transactions I don't know how to capture or how to classify, but if I think I will be a millionaire in the future it would make sense to follow a path of least resistance in order to keep whatever I do earn on Steemit.
From what I heard even from various CPAs there is mixed opinions and strategies. Some suggesting immediate cash out into fiat as a means of risk reduction. Others seem to think if it doesn't touch a bank account it's not taxed. I'm not sure which faction is right.
The good news is as long as people engage in the process in good faoth and act consistently then the situation is unlikely to spiral into criminal waters.
Its one thing to be genuinely confused with the tax code and either over or under shoot your liability in a given year - especially on the forefront of a financial issue like this. It's another to actively scorn the notion of taxation, period, and try to hide the ball entirely.