Yes SAFEcoin is like prepaying for usage credit. If used for that.
But if one sells their SAFEcoin for cash or BTC then that is a event that should be recorded.
While you have MIAD/SAFEcoin then it is pre-purchase of resource and not assets.
My uneducated opinion and I am no tax accountant/lawyer
In Australia I guess we are lucky in a sense that the tax return does not need to explain the source of the gains, only that they occurred and the final amounts. You still need to have the figures if an Audit occurs, but if you attempt to do the right thing then the ATO is usually fair.
As it was clear from the start that maidsafecoin Ian just a proxy token for SAFECoin, I would ben surprised if this triggers a tax event. They are essentially one and the same, but the token just hasn’t been substituted yet.
That’s simply not true, though, at least in the US. If, for example, you exchanged your MAID for BTC, you pay taxes on your gains from MAID at the point of “sale”. If the US sees the transfer of MAID to Safecoin as an exchange, like they would to exchange it for BTC, then you have to pay taxes on your gains at that point.
It is an interesting argument that one prepaid for resources, since Safecoin will be a utility token, but it would still likely resort in a court case at the very least. I, for one, would not like to spend my gains fighting the IRS on whether I owe them money.
But BTC is a different asset with a different price, Safecoin is a replacement for Maidsafecoin. Safecoin and Maidsafecoin will have the same price when the convertion happens because they represent the same asset. It would be great if @SwissPrivateBanker could join this conversation because he seems to have quite good skills when it comes to taxes.
Who should execute that ? In Austria you only have to pay income tax, if you want to realize your coins in EUR. If you are able to prove your coins are longer than one year on the same address, you dont have to pay income tax.
While I agree with you, this is the IRS we are talking about. I doubt they have a deep understanding of the inner workings of all these cryptocurrencies. To them, it is an exchange of assets. Now, you could probably take them to court, and win, because the argument is sound. However, I think the IRS will go after people, especially for those that keep their funds on exchanges like Poloniex, which are required to report transactions to the IRS. For those of us with our coins off exchanges, it becomes a point of whether or not we should report it.
Exchanging MaidSafeCoin for SafeCoin is akin to going to the bank and depositing a dollar to your bank account, you then change your dollar bill into an electronic dollar in the bank’s systems. It’s just another representation of the same thing. Now, how to ensure tax authorities see it the same way…
It is not easy to know the correct answer, hopefully someone can afford contact a tax auditor, tax lawyer or simply call IRS and ask them, soon or when things get closer to release.
I think there will actually be a massive discrepancy in price during the migration between maidsafecoin and safecoin. Safecoin will be a new protocole, something exchanges will have never seen before and they will spend weeks figuring out how to actually list it.
The first transactions on exchange might trade 10x compared to maidsafecoin price in my opinion when eventually it hits the market.
If the switch between maidsafecoin and safecoin is a swap, a lot of jurisdictions will consider it as an actual trade, and it will be taxed, capital gains will be due.
Tax authorities will consider the 2 coins as two different cryptocurrencies for sure, and they will argue you were active and not passive investor who held to it.
I think the idea of claiming safecoins thanks to your btc private key is a fantastic idea.
Yeah I really do hope they can implement the swap without a burn or actual omni transaction for those of us with omni wallets. I am not sure how it can be done, maybe a secured webapp where we input our wallet details/private keys and such and we just get the safe-coin and it keeps track of those coins that have been converted vs not? Would be ideal although the central attack point sort of scares me. Maybe an app ON the first safe network can do it securely !
But that’s a ridiculous amount of work for the exchanges. They would have to lock trades on MAID, deploy their Safecoin exchange mechanism (however that is going to work), and then individually confirm the private keys per account.
No, this is not “for sure”. There is still no guidance from the IRS on the tax implications of hard forks so this event (exchange maidsafe proxy for real coin) will certainly not have a carved-in-stone response from tax authorities anywhere on the planet. Tax laws are subject to interpretation and many existing examples are used to frame new laws. One can only draw on example of existing ways certain events are deemed taxable. Until there is clear guidelines in crypto on how or when to claim a capital gain, use the existing parallels in tax law.
Well, in the UK even barter is subject to taxation. As a maidsafecoin is essentially a receipt for a purchase on a not yet delivered product, I think there is a strong argument for it not being barter. It is like a pre-order purchase.
That’s an interesting idea. If you sign with the private key so that the MAID become worth zero you could argue you lost a dollar for each dollar you earned and in the end there would be no loss and no gain, so no tax.
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