09: Decentralized Decision Making: Proactively Building Dash Decentralization

[Nyk]

The US tax laws are now clearly laid on on the IRS website. You can review them on the link below. IRS state that cryptocurrency is dealt with as property and that the gain or loss must be accounted for as a capital gain on sale of the coin. Refer to Q4 on the link below.

IRS website Cryptocurrency and taxes:

Frequently Asked Questions on Virtual Currency Transactions | Internal Revenue Service

Frequently asked questions and answers about Virtual Currency transactions.

www.irs.gov

Bearing in mind that multiple purchases of coins could be made over a period of time further completing the tax calculations. Yes, people in the US can spend their Dash but it if it is not reported correctly they can be tracked down and fined or more. The US is famous for its rigor in collecting taxes. It is one of the few countries in the world that tax citizens on citizenship - meaning even if they have left the country they are subject to US tax law.

Can you link where it was stated clearly? Reading through it, I'm not really understanding how you would determine the tax of dash having paid sales tax at the same time. They aren't very clear overall on micropayments.

"Generally, a person who in the course of a trade or business makes a payment of $600 or more in a taxable year to an independent contractor for the performance of services is required to report that payment to the IRS and to the payee on Form 1099- MISC, Miscellaneous Income "

Which makes me think you don't even have to report anything less than 600$, but again its not clear. Maybe you understand it better, and can enlighten me?


If crypto is taxed for micropayments as you say it is, then that seems unenforceable, because there is no way for the irs to collect the information required, and if they were able to the taxes associated with it wouldn't amount to enough to make it worth doing.

Ill just ask my buddy thanks for the link.

 

[DeepBlue]

Can you link where it was stated clearly?

I gave the link to the IRS site in my previous message where it states exactly what I wrote. Below is the IRS link again:

Frequently Asked Questions on Virtual Currency Transactions | Internal Revenue Service

Frequently asked questions and answers about Virtual Currency transactions.

www.irs.gov

 

[Nyk]

I gave the link to the IRS site in my previous message where it states exactly what I wrote. Below is the IRS link again:

Frequently Asked Questions on Virtual Currency Transactions | Internal Revenue Service

Frequently asked questions and answers about Virtual Currency transactions.

www.irs.gov

I read what it said... you said its clear, I'm saying it's not.

 

[AgnewPickens]

I read what it said... you said its clear, I'm saying it's not.

The IRS has not declared a deminimus rulling for crypto yet, there really is no guidance, but you are right, it
would be an accounting nightmare to try to keep track of every direct payment using crypto.

 

[DeepBlue]

read what it said... you said its clear, I'm saying it's not.

I would like to clarify something. I am quoting what is written on the IRS website. It is not my opinion.

@Nyk I will copy and paste, exactly what is written on the IRS website regarding taxes and cryptocurrency. All of the text below is taken from the link I provided on the IRS website. The way crypto is taxed is clear enough. If you, or anyone says it's not clear then can you state specifically what is not clear about it. Also give you reference URLs to official government website to backup what you say, as I have done. If you cannot give those official references that go against what is written below then you are quoting your opinion only. As I said this is not my opinion below is the text exactly copied and pasted from from the IRS website on the link I gave you previously.


============================Start Copy and paste text from IRS website======================


Q4. Will I recognize a gain or loss when I sell my virtual currency for real currency?

A4. Yes. When you sell virtual currency, you must recognize any capital gain or loss on the sale, subject to any limitations on the deductibility of capital losses. For more information on capital assets, capital gains, and capital losses, see Publication 544, Sales and Other Dispositions of Assets.

Virtual currency is treated as property and general tax principles applicable to property transactions apply to transactions using virtual currency. For more information on the tax treatment of virtual currency, see Notice 2014-21. For more information on the tax treatment of property transactions, see Publication 544, Sales and Other Dispositions of Assets.

What records do I need to maintain regarding my transactions in virtual currency?

A45. The Internal Revenue Code and regulations require taxpayers to maintain records that are sufficient to establish the positions taken on tax returns. You should therefore maintain, for example, records documenting receipts, sales, exchanges, or other dispositions of virtual currency and the fair market value of the virtual currency.


============================End copy and paste text from IRS website======================

Reference URLs from IRS website:
https://www.irs.gov/pub/irs-drop/n-14-21.pdf

Frequently Asked Questions on Virtual Currency Transactions | Internal Revenue Service

Frequently asked questions and answers about Virtual Currency transactions.

www.irs.gov

The IRS has not declared a deminimus rulling for crypto yet, there really is no guidance, but you are right, it
would be an accounting nightmare to try to keep track of every direct payment using crypto.

@AgnewPickens, you are correct, however my understanding is ruling you are referring to is to request changes to the existing tax laws for crypto, and since this has not yet passed the existing tax laws, stated above are applicable. If they are not applicable I am not clear why it is stating that taxes must be paid on capital gains on crypto?

There are now also new IRS questions regarding crypto at the very top on the Tax form 1040.

When IRS Asks About Cryptocurrency On Your Taxes, Answer Carefully

Did you do any crypto in 2019, yes or no? If you check no, but IRS later finds it, you could face big trouble. You have to answer and file under penalties of perjury, and the IRS is unforgiving. Just look at offshore accounts, where the IRS won big time on just such a question.

www.forbes.com

IRS Intensifies Hunt For Crypto Tax Cheats

You may think you will not be caught, but the IRS is hunting crypto in a big way. The best way to avoid penalties is to disclose and report showing you did not willfully evade taxes. You could face large penalties and even potential criminal investigation.

www.forbes.com

The above information is enough to show that the US is taking taxation of crypto seriously and there can be serious penalties for those that do not pay their taxes on crypto gains according to the articles posted and the information on the IRS website. With all that in mind I cannot see how anyone would want to spend their DASH on cheap goods and services to get a 10% discount with craypay, a centralized body, and in so doing, risk being caught out by the IRS. Who would take that risk for a cheap discount? My point that not only is it a complete nightmare to account for gains and losses it is also a complete nightmare when it comes to the taxes and the penalties and the legislation around crypto in the USA. Is it really worth taking the risk?

But not only this people in the US are buying crypto for investment purposes i.e. to see an increase in value. Dash is also appreciating in value over the long time period (5 to 10 years) so who would want to sell an appreciating asset to buy goods and services in the US? It doesn't make sense to do that.

I have made the point as best that I can. It is clear that others feel differently. My point is there are countries in the world where these draconian tax laws do not exist and the governments have actually encouraged people to use crypto and passed laws so that people can use the crypto as a day to day payment as they have done in Venezuela. It makes more sense therefore to invest in such countries to establish Dash and where there is a real need to use Dash as a day to day payment method which is also desperately needed.

 

[Nyk]

Short term capital gains if you are buying/using it a few days a week are likely negligible and long term capital gains aren't taxed up to $40-80k depending on filing status.. so the real problem here is when someone has gained a substantial amount of value in a given tax year and has the currency for less than a year.. This is added to income and anyone making over 40k a year could potentially get into trouble. The other side of this is they would have overpaid taxes in other years due to losses. This doesn't take into account that some of the other pieces of information we have points towards not having to pay taxes on payments under 600$.

I personally know a lot of people looking forward to the craypay app who aren't interested in speculating on crypto.
People like this likely wont even think about taxes and imo the bottom 50% earners in the US wont even need to on micro transactions. (depends on how much Dash they spend).

Regardless, A really shitty pidgeonholed tax system isn't a reason to not focus on things that help adoption.
CrayPay imo is exactly what dash needs to actually get people out and using it.
Building the userbase is the most important part of this entire movement.
I expect soon we will have crypto tax laws that make sense and don't require low income citizens to hire experts to figure this stuff out.

 

[DeepBlue]

One of the biggest problems with the Dash governance system, in my opinion, is that there is a tendency to be blinded by what we wish as opposed to what is actually real. There is a big difference between the two. When MNO's vote in projects that offer something that MNOs want they have a tendency just to vote for it. But that is not a sound way to vote for a project. It must also be a project that is feasible to achieve. Very little consideration is given to is it feasible.

I've read all the comments above about people thinking that the Craypay project is a great investment because there are 155,000 new outlets that accept Dash. Don't you think that I would want this to be a great investment too? Don't you think that I would also want an investment to work like this also? But I do not see what I wish. I see what is real.

The comments made above about Dash and craypay being a great investment in the USA don't seem to add up to me due to the tax issues in the USA. It also doesn't add up because people don't want to spend an investment they bought for increasing in value. It also doesn't add up because credit cards also work just fine in the US and the incentive to spend Dash in Craypay is to get a 10% discount on purchases. What is the point of this when Dash can go up by 10% or more in a day?

People may not like my observations and you may try and find ways to bend reality to fit with what you wish. The fact of the matter is that Dash is not suitable for day to day purchases for everyday goods and services in the USA for people within the tax system. People should not have to worry about tax calculations, or capital gains tax or if they have earned more than or less than 40K . Cash is Cash. People should be able to spend cash for whatever they want without worrying about such constraints to meet US IRS tax laws. You may all support the Craypay deal for whatever reason. So far nobody has given a logical reason based on reality where I can see it is a worthwhile deal compared to spending that money in a country such as Venezuela, or Turkey, or Argentina or Asia where Dash can get established for real as a payment solution without the complicated tax implications. Countries in which there can be real day-to-day adoption for everyday payments. Isn't that what Dash is claiming to be all about? We can get so much more value from investing in countries that actually need a viable financial system rather than countries that already have one.

I could see Dash, however, being useful as a financial system in the USA for the unbanked or those without tax obligations or people who are outside of the tax system and perhaps that is where the potential lies for Dash in the USA. I read a report that stated that 25% of people in the USA are unbanked or without traditional financial services. Dash, for this particular demographic, might be worthwhile and perhaps that is the area where we ought to focus some research to see if Dash could be established in the US.

I feel in order to make sound governance decisions we need to look past what we wish and see what is. We need to assess the team running a project rather than just the project itself. We need to asses the legislation and the tax laws in the country in which the project is expected to operate and most of all we have to be honest with the expectations and base decisions on sound data rather than what we wish things to be. We need to look at markets that are outside the country where we are familiar and instead choose the countries where Dash is most likely to be successful. We need to compare one investment opportunity against another and choose the most feasible one and then compare that winning idea against another and so on until there is just one investment idea left.

Quality Governance decision making appears to me to be one of the greatest improvements that Dash needs to make in order to invest wisely. In addition if someone in the community has shown to consistently not be providing the performance that we expect I see it as our obligation to state that - not to cover it up, ignore it, or protect such individuals just because they are a respected member of the Dash community. They may well be, and their contributions may well be valuable, in other areas but if their performance is not up to scratch in one area we should not turn a blind eye. If someone is consistently not performing in one area I feel it is absolutely necessary to point it out - otherwise we are not dealing with reality again. We're dealing with what we wish to be.

It is essential to be honest in order to see reality and it is only in seeing reality and dealing with reality can we actually build a solid foundation for growth and success of Dash, or in fact any project. Otherwise we are just living in a dreamworld.

 

[Geert]

...The fact of the matter is that Dash is not suitable for day to day purchases for everyday goods and services in the USA for people within the tax system.

If we succeed, they will have to change the tax system. We're on a mission from God.

 

[malika007]

weel said and lot of think need to find.