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RE: The IRS is data mining social media, Steemit is on the radar

in #irs7 years ago

Steem Power from what I can see doesn't meet criteria of constructive receipt because until we power it down we don't have control over it. We also have no way to determine with 100% certainty when we'll receive it even if we power it down because developers can decide to alter that.

I think this is going to be central to one of the core issues involving Steem and taxes. At what moment is it considered received? Steem Power can't be sent to an exchange the moment received so how can it under even the most conservative perspective be income?

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I would tend to agree on the constructive receipt analysis (if the rule applies) which you are setting forth (subject to my deeper dive of cases); with one key caveat. The IRS might argue, if someone elects to receive 100% Steem Power instead of 50% Steem Power / 50% Steem Dollar, then at least 50% of the Steem Power received out of 100% is constructively received as we had control to take Steem Dollars and cash out instead of locking the extra 50% up. And, I also want to point out, the crypto currency if it is "property", then property rules apply too (Section 83). I haven't yet researched whether constructive receipt still applies, or becomes non-applicable, for property transactions.

Other than the 50% electable Steem Power, it would be unfair in my opinion to be forced to treat the Steem Power as received before it is available to withdraw through a long power down (who knows what the right way is though), when we have no say otherwise (standard 50% reward, or curation rewards etc). Still, it is ridiculous (even if the correct way) that we may have to pay taxes on earnings that are tied up and unusable for withdrawal or even to pay the taxes on such earnings; however the stock compensation rules show the IRS has no problem with this happening; and Section 83 makes it so.

Yes but there is no legal guarantee that we will ever get out Steem out of Steem Power. It's speculative and so to pay income tax on something we might never receive is strange to me. At best Steem Power is some sort of smart contract.