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.
I meant unfriendly or ill-intentioned tax authorities (like Spain for instance). you are right each juridiction is different.
hardforks, airdrops, swap into main nets, ICOs - each case is different. each country will have its own ways of considering it.
But no sale occurred.
No profit was made.
It really is that simple.
If Maid goes down to 0 and is not burnt following the switch, it might actually be declared as a loss and deductible ^=^
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.
That is not true. In europe there are so many countries where you can’t claim loss s from trading for tax purposes. You tax profits and loses are not allowed to lower your taxes. This is at least in Finland, Czech Republic and Slovakia and I bet in many more. Active exchanging of coins in those countries forces tax event and if price drops ps after, those people are doomed.
True, but there are also some where you can deduct losses, so it would vary from country to country.
Yes, it will vary. But if conversion from MAID to SAFE coin is passive, and people are not forced to move OMNI token than everyone is perfectly protected from tax liabilities. But if people have to move coin to burn address, than many will end up in trouble. The more I think about it, the more I think it should be publicly known ASAP. People who live in countries where they have to pay tax on active conversion should know it now. I wish someone from MaidSafe will provide us with details if it will be active or passive.
I think we are thinking a lot ahead, we need to have Safecoin first for the conversion which is another year away if not long. A lot can happen in between.
Except that in the US, capital gain loss deductions are limited to $3,000 per annum.
The good news is that the IRS is neither as smart nor as competent as you believe them to be. Give them their unearned profits at your expense if that is what you choose to do.
Do not accept it.
The governments say you are obliged to report. Your real genuine obligation is a personal decision. You are not a slave in any way, shape, or form. Do not falsely make yourself into a philosophical ‘victim’.
You will make your choice based on your morals and values - don’t insinuate that you have no choice by blaming some ‘system’ of tyranny for your choices.
So we should delete the word ‘obligation’ or at least ‘obliged by law’ from the dictionary?
[quote=“bones, post:29, topic:23995, full:true”]
If your not selling for a profit theres no tax.
Its a replacement coin for one already owned.
No profit = no tax.
That would depend on where you live.
If memory serves, any personal property can technically be taxed in the USA as long as the value of the item is over the minimum taxable value. This is why cars, boats, homes and other large items held for personal use are taxed yearly. Yes, cryptocurrency is personal property last I checked.
I think this is because you don’t have to sell something to make use of it. For example, a car could be used as collateral to get a loan. You still own the car as long as you fulfill your side of the loan. This causes the car to have a useful value without being sold, so it is taxed on that value.
If that is the case.
Surely your assets are taxable anyway, as a place holder token, or funtioning token.
The swap is then irrelevant to that tax situation, if its to be taxed anyway, no?
Does anybody know what exactly your Crypto tax obligations are in Wyoming.
Im not very well versed in US tax law. Does no state property taxes on crypto exempt you from crypto taxes all together?
The senate of Wyoming has passed a decision (bill 111) exempting cryptocurrencies from property taxation in the state.
How does this affect federal taxes?
Not a bit in the US. Just no state taxes.
That’s whole dependent on the state/municipality, that doesn’t apply to federal taxes. Federal taxes only taxes gains on assets after their sale. The question then becomes, does the exchange of MAID for Safecoin constitute a “sale”. According to current US law, it almost certainly does. That means the gains of MAID will be taxed at the time of the exchange.
Granted, the network should be more or less anonymous, so it’s all self reporting.
Maid is omni token. It is not anonymous at all. If transition from MAID requires active burn transaction than it is tax event easily trackable. If it is passive and Safe coin is claimed with private key of omni address than it is anonymous and it is self reporting.