RE: Valuing Steem Rewards As Taxable Income Is A Vast Overstatement Of Tax Liability - Part 3 - Powering Down - "Steem Power" Is Not a Tradeable Asset, It's a Proxy For Value Like A Stock Option
So here's my non math view on the taxes. :) Since it is a de-centralized currency, it should not be taxable by any means, unless and until it is exchanged for a centralized currency, such as cash. At this point, you deduct the total original cash investment for the tax period (which the bank used will have a record of as well) and any additional crypto being cashed out would be taxable as income.
To be either calculated once per quarter, just like all other taxes, or once per year for non business.
Steem, should not be taxable at all. One cannot directly exchange steem for dollars, it has to go through an exchange into a second crypto, and then be exchanged again for dollars.
The Fed should only concern themselves with the last exchange that can directly be measured, money in, money out.
“Should” is rather irrelevant, when it comes down to the matter of what regulations are. I agree with you 100% that such would be ideal, though doubt the “should” argument would ever hold up in an audit.
Haha, you are right of course...'should' making it my opinion, not fact...but I do believe that is how it Should work... :)
I appreciate your comment, and I think you are mostly on the right track.
"To be either calculated once per quarter, just like all other taxes, or once per year for non business."
This is an important point. Currently, in the US, if you hold an asset under a year, it's regular income - like a day trader. You pay income tax in your normal bracket.
If you hold it more than a year, then it is capital gains. This is taxed at a substantially lower rate.
Generally speaking, there may need to be some allowance for different time horizons in whatever final taxing strategy is employed.
"The Fed "
I know you probably mean .gov here, but I'm still going to take this opportunity to say "Boo non-Federal-Federal Reserve, Boo".
I missed your reply before :O
Ahh, I didn't know that about capitol gains. I am a little person who has done retail for years and never owned anything, traded, or held assets. I think you are correct about different time horizons though. I can see where it could get messy.
I just feel like it is not an asset until you hold it in your hand...until then it is a promise of an asset, and should only be taxed at the point of entry into tangible asset. They way it is done, all forms of currency are taxed over and over and over...and then when you die they tax it again.
Yes, I meant Gov... :) (though it all goes to the Fed in the end...we should Tax them on that..does the Fed Reserve even pay tax on the money that they create, and all they collect?)