OR...
I can just not worry about all of that and pay on whatever I cash out into Dollars?
Yeah...I like that plan a lot better. It's hard to claim earnings or assets when they're not "real" and the "value" constantly fluctuates. If I don't have to pay taxes on my stocks until I sell them for a profit, then I don't know why I should feel obligated to pay taxes on fake digital money that can be worth $0.00 tomorrow.
Not happening.
Good job on the post though.
Technically, you are required to pay taxes on the value of what you earn. Example, if you work for a publicly traded company and get stocks as a bonus, you have to pay tax on that even if you don't sell the stocks. Usually companies will actually take the tax out before they even give you the stocks. I'm not a tax professional and I don't like it either!
Technically, I don't even care. I don't work for a publicly-traded company and my rewards on this platform aren't stock. The government has been very clear about how they don't classify this stuff. So, if I decide to pay them anything, it'll be as if it were income or capital gains. I'm not interested in their absurd calculations and other political douchebaggery. They can't exactly tax me on holdings that they cannot prove that I own.
I suppose they can try...
Do you playa!
Hi, I am clearly very late to this thread but I just want to clarify. "get stocks as a bonus" In the US tax world:
If employee is awarded straight stock free of all restrictions for a bonus I would agree there is immediate taxation, however this is usually not how it works with public companies - you would get a restricted award or options. So, for equity based comp that has a vesting, there are three key event dates - the grant date and the vest date (and third exercise date for options), the taxation at each point in time depends on the very specific facts/circumstances. I might write an article just on different options/awards, so that it gets people thinking about how taxation of steemit currencies works.
I'm sure you just meant eventually there is taxes and I am over-killing here, but I was dying to just add that point in.
This is not tax advice to any one individual and shouldn't be used to attempt to avoid taxes/penalties.
I completely agree and the IRS leaves us all confused about this. I mean people in Second Life, how do they pay taxes for their trades of in game items? How about people in other online games? What if it is baseball cards and people trade them?
I realize we are supposed to pay taxes on all of these trades but it's unrealistic to expect any human to calculate every trade they ever made for their entire existence. I will make my best effort to pay what I understand I owe, and if they give more clarity then I can better direct my effort. As things are now, I have no idea if I paid the tax the right way, or if I got the right amounts, and using magic values on Steem websites which don't reflect what it is when it reaches my bank account is even more confusing.
By the time it's translated into fiat (real currency) it's usually not whatever is reflected on these sites. It might be more in some cases, but often it is less, and it would be easier on all of us and possibly better for the IRS (they can collect more tax) if we were allowed to simply capture everything going into our bank account, or at least onto the regulated exchanges like Poloniex and Coinbase. I can handle exporting my Coinbase transactions and paying tax on that, along with Poloniex, Bittrex, etc, if that is the case, but not the amount Steem is worth at any given day doesn't seem to reflect what a person will actually get for the Steem after multiple trades.
First you have to send the Steem to Poloniex or Bittrex as SBD. This SBD then gets traded into Bitcoin. Bitcoin can actually be sold for fiat so it's at least convertible. Steem isn't that popular and SBD isn't really used outside of Steem ecosystem.
Exactly! There is no point in calculating taxes on cryptos that have not been cashed out. If it's not already in your pocket, you don't actually have anything but hope. Last time I checked, they weren't taxing HOPE - yet!
Agreed. I'm no accountant but you shouldn't have to pay or factor in taxes except on gains.
Yeah as I understood you only tax it as capital gains if you cash out for a profit. There's a difference in percentages for short term and long term gains. So just hodl.
For US citizens, this is very accurate. The estimated value of a Steemit account is not what is taxed. The dollars derived from the account are taxed as a capital gain. Last I heard, that was something like 20%.
I've also done some reading on Bitcoin taxation and the like from a few different sources and found a fair amount of consensus. If you cash out your investment, you will be taxed on the gain, not on the value of the security.
Yea. Paying taxes based on the usd value when received has the potential to fuck you. Since Steem could be ZERO after Hardfork ## implodes the system. I'm gonna run it by a tax attorney anyway.
I'm going to run it by my tax cat-torney and see what she thinks.
Like... You are going to ask your cat?
@ats-david
Cat
@ats-david
Cat
licks ass
Anyway
(cat will probably be more knowledgeable than actual tax attorney)
hahahhaha
I actually just asked her. She said...
Your tax attorney is a pussy.
Hahaha!
Finally, someone laughed. :)
Plus you don't have to pay the cat! Well, maybe give it a treat, which costs money. Plus you have to feed them every day, and pay for flea and worming treatments, and pay vet bills when they get hurt....... I'll take the attorney :D
Yeah...but if you're petting an attorney while it sits on your lap, people are going to think you're weird.
That look pretty much says it all :-)
most eye opening response to that. Tax laws change all the time. Do you pay tax on something that was $3000 one day and then 0$ then next?
@ats-david, its always easy and good thing to pay government money when investments are going well, what of when someone enter a scam crypto? I rather reinvest my gains till am sure that I can relax and live well with them and then I will pay taxes on the profits...good post though @mynameisbrain . Following both of you for more posts, lets stay in touch
Exactly
Hm. Donations from abroad are tax-free in The Netherlands. Consider this I must.
If you're from the Netherlands then check out dereunie.info on how to avoid tax all together. Tried it myself.
This reply alone got you a new follower. LOL!
I'm sorry but you're wrong @ats-david, you DO have to pay taxes on your stocks if you received them as income -- and the same is true of Steem, SBD and Steem Power.
STEEM isn't received "as income" and it's not classified as currency.
In any case, I don't even care - as I stated multiple times. I'll just report my Dollar earnings however I choose to report them. I'll let the bureaucrats figure out how to proceed after that. I'm not going to fret over it. I have better things to do.
The IRS clearly states that it considers receiving anything of value in return for performing tasks (aka work) as income. As I've said before, think "stocks".
Does this include receiving food for work performed?
IRS Virtual Currency Guidance : Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply
https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance
The fine print on SteemDB:
"* All Steem Power & VEST calculations are done using the current conversion rate, not a historical rate. This may cause some calculations to be incorrect."
This is useless to just copy the table when it doesn't provide you with any historical rates. Where would those rates even be pulled from? Poloniex? Coinmarketcap?
In any case, we need the historical rates. This process needs to be automated. Also there probably aren't enough accountants for everyone on Steem to call.