I'm really hoping that there aren't specific laws made that tax crypto gains higher than normal capital gains and losses that are made from the stock market.
Not sure if you know this, but would converting Steem on an exchange to a bigger alt coin and then selling to USD be considered a long term 10% tax or 30% tax?
The general rule is first- in to first-out. If you held the steem for over 1 year and then move it to an exchange, that's taxable at 10% when you sell it. If you haven't held that amount of steem for over a year then it's 30% when you sell it. The 10 or 30% tax is based on the value of steem when it came into your possession and then also on the difference in price. For example let's say you got 100 steem and steem is worth $1, you hold it for over a year and sell it into another coin, you would be taxed 10%. The real convoluted part is whether or not you are taxed 30% on the Bitcoin the exchange uses as the intermediary. There are a lot of questions that don't have answers.
I feel like that is near impossible to really figure out given the nature of Steem. People that are active users are receiving Steem and SBD multiple times throughout the day from posts they made a week ago! Plus there is no initial investment right up front either besides time for most of us...
Really interesting dynamic to think about. Thanks for elaborating on that!
Oh it's much fuckier than that. How do we tax voting on another person's post? Did we give them a gift or do we pay taxes on that because it's interest gained from our stake weight on the platform? My general thoughts are the government realizes how much money is in crypto and they want a piece of the pie. They just so happen to want the lions share, the buzzards share, the ants share, and if we're lucky there may be some maggots to feed on when all is said and done.
If we all consider ourselves on this site at least "adept" to "expert" knowledge people for crypto and blockchain and there are STILL things that we learn day to day, then how are politicians suppose to understand it AT ALL. Every point you raise just makes it sound worse and worse lol, hopefully the lack of understanding on capital hill doesn't screw us all over.
I know it might seems strange or risky but I actually think the most pragmatic thing to do is to just report what you cashed out and hope for the best. Because just owning a steemit account is fucking insane the moment you try to figure any of it out.
I am going to try the simplest approach first then if it gets more complex from there I will react accordingly. I don't view this as tax evasion I view it as sanity.
I think we are living in a very huge gray area. What Steemit Inc. ends up doing will determine what rest us need to do. Taxing stuff that was crated out of thin air before it’s even exchanged for money is insanity. All we know for sure is once its exchanged on the open market then taxes is owed and many places will be reporting that.
We literally will need tools to track and determine “gift tax” if we are even going classify upvoting another person in that way. There just way too many factors, countries, legal entities. I don’t even know from a legal standpoint where my Steemit account’s “wallet” is legally in the world. Heck if we try and go off logic of “where the transaction was processed” that’s a massive issue right there alone with possible of multiple countries trying lay claim to that.
For now I think you are on the right track.