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
This is part of why I wrote this post:
"As far as I know I would still have to put in the value on the day I received it and then I would be well within my rights to sell that for a different value and make up any difference with capital gains or losses."
This is not correct. That was the point of me writing this post about (to) you.
"Taxation begins at the time of exercise."
Steem Power and Steem Rewards are not valued until the time of exercise.
Everything I suggested in this post comes directly from the IRS guidelines for valuing stock and asset options.
The whole point of this post was that I recalculated your tax liability using the IRS own guidelines and found it to be much lower.
"I might as well pay the most I can stand to and then live free of the fear of any audit"
You are voluntarily overpaying your taxes. This is a fear-based strategy.
I am not suggesting anything that (should) get you audited, but anyone can be audited.
This, I assume, you are meaning at the time of Power Down - in the case of receiving a 100% Powerup of rewards...
So essentially, you’d need a method of tracking every single rewards payout in Steem Power - and then a protocol to determine what fraction of that are “exercised” as a Power Down, each week after for the next 3 months (if your Power Down is on the 3-month setting, versus older ones like my account got initiated on a 2-year breakdown) - adding up those weekly fractions for all 13 weeks, get the actual figure to be calculated as “income?”