Tax Implications for Exchanging MaidSafeCoin for Safecoin

Has anyone thought about or done any research on the tax implications for when we exchange our MaidSafeCoins for Safecoins?

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That would mean by US law I would have to hold my Safecoin for at least a year before selling them to get the lower capital tax rate.

Another thing to consider is, every time I spend Safecoin on the network for example store a file, make a blog post, upload a video, or send and email that would be considered a capital gains taxable event.

Well - all this paperwork will be a nightmare - I really begin to become unsure if it would be good if safe succeeds :zipper_mouth_face:

Well - on the other hand - no money for coin now means no paper work later 🤷 everyone wins :slight_smile:

Another question, would Safecoin be considered a crypto currency like bitcoin or a virtual currency like World of Warcraft golf or Second Life Linden Dollar, both are taxes differently.

This is true until I sell some Safecoin on an exchange for US Dollars and my bank reports money being deposited into my account to the IRS. And since there is no paper trail how am I going to convince the IRS not to throw me in jail?

Why would I sell it on an exchange? Top of my of head, you can’t buy a car, a house, or any other large purchase with Safecoin. So, an exchange would be necessary.

Are you looking for answers on whether you are obliged to report any gains from your crypto investments? The answer is yes. You bought your Maidsafe coin with bitcoin. That is a taxable event. For the purposes of this discussion, when your Maidsafecoin gets converted to safecoin that is also a taxable event. This difference is that taxable event will not/should not result in a tax liability because it’s one for one.

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Let’s say you paid one dollar for bitcoin, and when you bought Maidsafecoin Bitcoin was $100 … this is now a taxable event. Based on the fact that you made $99 on the bitcoin.

The govt doesn’t care that you have some untraceable asset. You are obliged to report.

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To clarify, your Maidsafecoin was worth $1.00 and it was converted to safecoin which also had a value of $1.00, so while it’s a taxable event, there is no gain or loss.

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I accept that there is an obligation to report. I’m just curious on what is the correct way to report. I’m not a big fan of getting in trouble with the IRS.

Not exactly true. Gain will be determined by the price you bought MSC and the price you exchanged MSC for Safecoin. If you bought MSC at $0.5 and exchanged it for Safecoin valued at $1, then there is a $0.5 gain. But, how does one determine the price of Safecoin at that time? Is it based on the current exchange rate of MSC or does Safecoin have no value, as there will be no exchanges that exchange Safecoin at that time?

If it is the latter, then I would think it was exchanged at a loss. But, I don’t think the tax man will want to see it that way.

Maidsafecoin is a proxy for safecoin. This is well documented.

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Not unlike a stock splitting or consolidating.

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It’s definitely a gray situation, at best, at least for those in the US. I could definitely see the IRS sending some mean letters to people to pay taxes on the “sale” of MaidSafe. It would be unfortunate, but worst case scenario, one could just not transition their MaidSafe until they intend to sell, anyway.

Just exchange your safecoin into Bitcoin and use a Bitcoin credit card?

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Just a note: what is taxable, when it becomes taxable, and how much tax is due depends on which jurisdiction / country applies.

Most of this topic seems to be talking about the US from what I can see, but since it isn’t stated, and isn’t official tax advice I recommend who owns MaidSafeCoin to treat it with caution and do your own research! :slight_smile:

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This is a good reason to wait at least 3-5 years or more to exchange most of the MaidSafeCoins. It might need a court case to get resolved.

Hope the conversion of maidsafecoins to safecoins doesn’t have to be done in a very short time like only a couple years.

Common sense would dictate that exchanging MaidSafeCoin for SafeCoins is not a taxable event since you’re not actually selling your MaidSafeCoins and realizing gains, unfortunately common sense is not among the things that politicians and government officials are known for.

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but then you would be receiving something of value (safecoin) for free which would be taxable in some jurisidctions

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I see it more like buying top-up credit in the form of a code for a pay-as-you go mobile phone. the code is a proxy for usable credit. its not a taxable event when i text the code in to receive the credit on my account.