ADSactly On ADSACTLY - Part #39 - Taxation of Crypto - Part #2
ADSactly on ADSACTLY - part #39
ADSactly - Taxation of Crypto - Part #2
In the last post on crypto taxation (https://steemit.com/adsactly/@adsactly/adsactly-on-adsactly-part-38-taxation-of-crypto-part-1), we discussed an analogy of children, bullies and pebbles. Let's continue to explore further and read what the bullies have say. Check out the following wisdom, coming from the ones who should be smart enough to lead a country.
In sum, taxpayers must track their cryptocurrency purchases carefully. Each cryptocurrency purchase should be kept in a separate online wallet and appropriate records should be maintained to document when the wallet was established. If a taxpayer uses an account with several different wallet addresses and that account is later combined into a single wallet, it may become difficult to determine the original basis of each cryptocurrency that is used in a subsequent transaction.
Hello? "Every purchase in a separate wallet"? Do we use a different wallet every time we shop in a mall? We all got to love this part: "it may become difficult". :D
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This one is also brimming with wisdom:
In summary, if a taxpayer acquires cryptocurrency as an investment and chooses to dispose of it by purchasing merchandise or services, any loss realized will be treated as a deductible investment loss. However, at times, it may be difficult to determine whether cryptocurrency is held for investment or personal purposes.
And yet again: "it may be difficult...". Is this another way of saying "impossible to impose and we'll decide for you whatever we deem appropriate"?
To be able to follow the "accounting instructions", every cryptopreneur needs to hire an army of paper pushers, whose only job would be to make sure that every transaction is done in a separate wallet and determine (on account of what?) if crypto transaction is investment or whatever they actually consider "personal purposes". However, not even an entire army of paper pushers may assure that it will be done correctly! The interpretations are too wide, vague and inaccurate. For example: What about a failed transaction resulting in a loss or will losing of a private password, and the entire stash along with it, be tax deductible? Will we be able to deduct such insufferable crypto loss from the overall fiat* tax that we're paying every year?
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Yeah, right...
It all makes us really pleased to see that the old bloodsucking system cannot find a way to continue its wretched practices. The nonsense of imposing the rule through financial control of free individuals must and will be replaced by a system that will not propel unjust taxation of individuals in order to support non-productive government officials and their crypto witch hunts.
According to the Notice, virtual currency is treated as property for federal tax purposes. This means that, depending on the taxpayer's circumstances, cryptocurrencies, such as Bitcoin, can be classified as business property, investment property, or personal property.
Property? Really? Can someone explain how can a non-governed, virtual asset be labelled a property? This is less reasonable than taxing people for gathering pebbles on a beach, proclaiming them legal property and making people pay real money for owning a bunch of pebbles. If we all start collecting dog shit and start adding a virtual value to it, will dog shit soon be proclaimed a property and be taxed?
Why not start taxing "property" in Second Life and other online games...?
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Why would one pay tax on crypto gains in fiat money if the regular tax cannot be paid in crypto? It seems that we are all considered fools when it suits the governments. In worst case scenario, the taxes on crypto should be payable in crypto. But, which government will take a non-legal tender 'property' as a regular tax? None! :D Why? Because crypto is not money, right? But they still want us to pay tax on gains on something that is not accepted as means of payment!
How about accepting pebbles or dog shit for tax, instead?
However...
We understand how the system works. Regular taxing of the fiat money income, taken out of crypto, is in order. We don't mind paying taxes, we only mind being considered fools. As soon as crypto becomes a worldwide legal tender and is widely accepted as means of payment for goods and services, take your tax on crypto earnings, by all means.
But, we cannot mix apples and oranges, the tax needs to be payable in crypto.
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ADSactly on ADSACTLY - Part # 38 ADSactly - Taxation of Crypto - Part #1
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This is an important point you highlighted. All these Governments and banks are trying to stop the surge of crypto currency. They are seeing the potential of crypto and want to take their share from our hard work. That is complete non sense to tax crypto in fiat
Now that document got me really angry - the amount of paperwork required just shows how they miss the whole idea - cryptos are fast, clean and elegant- and forcing those foolish regulations will remove the basis of the whole thing!
I didn't think about the point of being taxed for crypto in crypto and I must say it's brilliant! It will actually be a huge step of acceptance as it will make the governments stakeholders in the crypto world by themselves and they will be forced to care and advance the crypto world - they will be a part of it.
After earing this idea it's pretty much the most logical thing to demand! If you regard it as an asset that has to be managed like fiat regulatory - then take you pays in the currency itself!
The most frustating point right noe is that life are difficult just because goverments do not know how to deal with crypto - they do not publish orders to the banks and so people with large amounts can't use them for local purposes ( at least in Israel in the last few years and the situation is still the same)
With time I'm sure we will win! The revolution comes from the people and it will become a flood!
(I can feel the anger! Analogue to dog's poo! Thats how rage is supposed to be!)
While I firmly believe tax should be paid on crypto converted to fiat or exchanged for goods and services, I honestly have no idea how any govt agency can prove your transactions, let alone accurately track them.
I will be making my best effort to pay tax on all conversion to fiat and spent crypto. Other than that, I guess I'll just wait for the audit.
I am agree with you on this tax paying topic.The reception of tax by government will definately increase the trust on crypto currency.so it's future will become automatically bright..
it is sad theu do not fully grasp the idea
Screw it! I'll just wait for the audit and pay the bill.
I really want to thank you soo much for this and recent post regarding tax on cryptos. Everything you mentioned in your posts got me even more confused that as of now there is no way I would sell or exchange any cryptos I have been buying recently. Until they solve all these nonsense things taxation, which would take years to solve it, I’m holding like a crocodile or a pit bull. At the end I can be very thankful to “you” for “ME” being so confused of all these rules you posted. At the end I do belive it’s still not too late to buy crypto and not to spell it for a few years! Don’t invest what you can’t afford to loose!
MY RULE # 1!
lol
@justiceweye We at ADSactly never gave you any authority to curate this article as if your own. Do you know why? Because we have no clue who you are and we don't like unknown people arrogantly take credit for our article.
I looove when you mentioned “How about accepting pebbles or dog shit for tax, instead?”lol
There is, or at least was discussion about "US Bill to make transactions under $600 tax free" However this bill still hasn’t pass as far as I’m concerned.
Given that the price of bitcoin and other cryptocurrencies have increased so quickly in the past few years, even the most stubborn HODLers would be hard pressed not to consider liquidating at least a portion of their crypto portfolio to lock in their gains. This will trigger capital gains tax. Buying and selling cryptocurrencies is the same as buying and selling gold or stock. You can also consider donating cryptocurrency to your favorite public charity (not to a private foundation), can help you save taxes on the coins you do sell. The charity gets a large donation, and you get a larger deduction, if you donate the coins to a charity instead of selling the coins and donating cash.
I totally agree with you. It's just plain crazy.
I agree with you
voto si votas por mi
I read part 1 of this series but was unable to respond at the moment. I absolutely love the bully analogy!!! Governments are so accustomed to playing big brother and having control of every move we make that Crypto has them over the top with fear. They have quickly realized that they have pretty much no control over the crypto market and those of us who are involved. They are attempting to strike fear into people with threats and innuendo but the reality is that they will have a difficult time controlling anything here.
An interesting thought I shared on another blog is the nature of “why” some governments are starting to shift and claim that they are going to start accepting Bitcoin and possibly other Crypto as payments for a variety of services. Hmmmmm??? Why the radical shift in thinking? I personally don’t know the exact answer but consider the following:
And
Just some food for thought.
You'll be the funniest guy in Federal Prison! No, seriously, just pay your taxes and avoid the hassle.
Very apt
When there is a single thief, it's Robbery & when there are thousand thieves, it's taxation .. Vanya Cohen.
Rightly said about taxation, I mean we don't need to even discuss it. This is simply a blood sucking process of one's hard earned money. There was a time when government would say pay taxes because you are working .Like American President Roosevelt said Taxes are paid in the sweat of every man who labors. I mean why one's hard earned money is somebody's business. It's total injustice. There should be a limited tax slab, in order to manage the state funds but to kill a human with taxation is Capital punishment. This is a slow killer present in our society
https://steemit.com/nicolas/@jordanbelford/what-do-you-think-of-nicolas-maduro
This is a great post,,
It is quite enlightening
Naturel @titanik
Do you see who's got the upper hand?
The whole idea of cryptos is the fact that it can't be regulated and taxed. They just don't get it
I think they know this really well. But they want to use cryptocurrencies under their own trading software, which is centralised and also...taxed
To cash out crypto without paying taxes..Simple.Set up offshore Charitable Purpose Foundations!
Choose mission like "strengthen the capacity of people throughout the world to meet the challenges of global interdependence” (that is Clinton foundation) avoid too specific Mission like “raising money for children battling life-threatening diseases” (that's Trump - you might end up struggling to proof that)
Once you transfer your bitcoins to your foundation - travel the world first class, stay in most expensive hotels or do anything that you enjoy with a message that you do it to “raise awareness”.
Obviously even the elite have ways preventing them paying full tax. It's a flawed system