Is Blogging really the equivalent to mining?
tax·@dana-edwards·
0.000 HBDIs Blogging really the equivalent to mining?
- There is the assumption that the IRS will see blogging as it sees mining. Yet the only evidence is from the IRS guideline from 2014 which mentions mining specifically. - Confusion exists as to when bloggers get taxed. Does the blogger get taxed the instant they receive the cryptocurrency or at the moment the convert the cryptocurrency to fiat? Different articles give various conclusions such as: >Suppose Coinbase employs a woman named Jean. When Jean got hired, her salary was set at $100,000 — in dollars, not bitcoins. Every two weeks, Jean gets paid the equivalent of her bi-weekly paycheck in bitcoins rather than in dollars. What Jean does with those bitcoins is up to her. She can spend them, convert them to dollars or do a mix of both. "Cashing out" immediately safeguards Jean's earnings from the notorious price fluctuations that affect Bitcoin. In this example, Jean would be paid by Coinbase not by a blockchain. Also Jean is an employee and is not self employed which makes the tax situation much more automated and easier. And here is the most important question in the article: > So if you're just reporting everything as dollars anyway, the IRS won't necessarily know that you've earned any bitcoins? > That's one of the things that's still unclear. But what does the tax man care, so long as he's collecting the right amount? But what is the current consensus? Does the IRS care only about the dollar amounts? In that case Steemit is extremely confusing because it displays "Steem Dollars" which resemble dollar amounts. The UI team even made the mistake of using the $ symbol to further add confusion and all wallets are wide open to help the IRS. At the same time, there is no automated or automatic process for the blogger to click a button and extract all their csv files to input into TurboTax or any other. There is no guidance from the IRS about what form to use, and lack of clarity in general. Conclusion --- If the Steemit community which includes CPAs has reached a consensus that all taxes must be calculated the moment an account receives a reward then why isn't it in the UI? Why haven't developers actually enabled bloggers the ability to calculate taxes in this way if this is the agreed upon consensus of the CPAs? If it is not the consensus of the CPAs, and if most people calculate the tax after cashing out into fiat, or at least after sending it to some exchange like Poloniex, then that would explain why the UI wouldn't have any way to export because it would be expected that people do that at Poloniex or similar websites if not Coinbase. If the consensus of the Steemit community is to follow this model of dealing with taxes then Steemit the company has an obligation to change the UI to enable compliance. Keeping it disabled or not enabling it, only generates confusion while also opening the participants up to future risk. In addition, the Steem Dollar amounts highlighted everywhere make it seem as if the amounts on a post are scored in Dollars when it's actually not a perfect peg. If these amounts are illusions and don't really matter for what people can receive after taxes then I propose these amounts be replaced by the actual amounts calculated that the blogger will receive after taxes according to the country the blogger claims to be from and other information they enter into the formula. An app can be written or a bot, which can simply post a comment opt-in, to all bloggers who post. The comment should calculate for them how much they owe in taxes and an estimate of what they'll receive after taxes if they cash out. It can also provide a link to the latest IRS guidance if it applies and to a CPA willing to help. Unfortunately at the current time this app does not exist, and there is no bot, while the UI is both transparent and confusing to everyone. References ----------- - - - - 1. http://www.thetaxadviser.com/newsletters/2017/apr/cryptocurrency-taxes.html 2. https://www.washingtonpost.com/news/the-switch/wp/2014/03/25/got-bitcoins-heres-how-the-irs-says-to-report-them-on-your-tax-return/
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