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Taxes for accepted Dash proposals

Discussion in 'Budget Proposal Discussions' started by Barrett Davis, Feb 6, 2018.

  1. Barrett Davis

    Barrett Davis Member

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    Our team is about to submit a proposal and we wondering how the tax implications are for the US. Say you get 400 dash from a proposal to pay a team of 4, 100 DASH each.. the next steps to pay your team are:

    1. Dash -> BTC (exchange)
    2. BTC back to coinbase or gdax to USD
    3. Going from BTC to USD will be a tax hit (short-term capital gains.. right?)

    So we take the first time capital gains hit and then we have to pay income taxes per employee too right?

    How is dash core or marketing etc doing this?

    Any recommendations would be great.. trying to do some financial planning :)
     
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  2. Barrett Davis

    Barrett Davis Member

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    @Ryan Taylor mind shedding some light on this? if not publicly, can you PM me
     
  3. jeffh

    jeffh Member

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    You also have pay income tax on the Dash you recieve for the proposal even before you go to sell it to USD.

    Make sure to keep that in mind. Also, make sure that you have a tax ID and set up a coinbase business account so that you're taxed at the corporate tax rate rather than the individual tax rate.


    Sent from my iPhone using Tapatalk Pro
     
  4. Barrett Davis

    Barrett Davis Member

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    Thank you jeff. Does anyone else have experience with this as well?

    Creating a business coinbase account is hitting the pause button for months lol.
     
  5. jeffh

    jeffh Member

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    Try Bitflyer US instead. I think they do a business account as well. If you have a big enough sale, I can get you escalated for verification as I have friends there.


    Sent from my iPhone using Tapatalk Pro
     
  6. Chael_MMA

    Chael_MMA New Member

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    These are great questions. Thanks for asking.
     
  7. jeffh

    jeffh Member

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    @Barrett Davis It's actually worse than you thought on the income tax. You'll be paying income tax on the Dash you receive from the treasury system. It basically looks like mining because it's a coinbase (from the blockchain, no prior inputs) transaction so you might as well treat it the same way as far as taxes go.

    You have to pay payroll taxes on it when you're paying employees though.

    At the end of the day, I'm not a lawyer or an accountant though. You should check with someone who does this for a living. This insight is based solely on how I've operated and how I've been advised to operate and frankly it makes sense.

    Let me know if you have further questions and I'll do my best to answer them.
     
  8. John Flynn

    John Flynn New Member

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    I made a proposal last month to write a U.S. Tax Guide, but I got a bare majority, not the 451 overvotes needed, so I won't be writing it.
     
  9. TroyDASH

    TroyDASH Well-known Member

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    If you are doing dash-->btc-->USD

    Income tax when you receive the dash from the treasury. Capital gain or loss when you sell the dash for BTC. Capital gain or loss when you sell the BTC for USD.

    If there is not much price fluctuation between transactions then the capital gain/losses will be negligible but still should be reported as such.
     
  10. Barrett Davis

    Barrett Davis Member

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    Thank you. Any idea how to go DASH to USD?
     
  11. jeffh

    jeffh Member

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    @Barrett Davis I considered going through Mercury Cash as they have a Dash-USD pairing but their support is bad, their UX is bad, and I got confirmation that it would take weeks to get $30k worth of cash out after a sale - even with a business (corporate?) account.

    Uphold you'll have a similar problem with withdrawal limits.
     
  12. TroyDASH

    TroyDASH Well-known Member

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    You can try Uphold or Kraken but will run into withdrawal limits on both unless you have a business account or highly verified account. Uphold has a $10k/day limit for a normal personal verified account
     
  13. Ryan Taylor

    Ryan Taylor Well-known Member
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    We cannot offer tax advice. I would recommend consulting your CPA or tax attorney for advice. In most jurisdictions, receiving the Dash or any conversion from DASH to BTC or USD would trigger a taxable event... either income, short term capital gains / losses, or long term capital gains / losses.
     
  14. Santos Bermúdez Ruiz

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    Xcu6uQQ2DoAgV6Q2G5jhN8pCNhtKdNLFVA
    Hey guys,

    I actually dont know how to advice you since the regulstions are related to your jurisdiction.

    Sorry I cant be of more help.
     
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  15. bigrcanada

    bigrcanada Well-known Member
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    I still think that is a very important piece to have done. Crypto still have a "cyberpunk" element to it and see any taxation or such discussion as sacrilegious. But it is slowly changing. If you ever attempt to do this again...I'm sure we can get some community DASH donated to help with the proposal fee.
     
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  16. bigrcanada

    bigrcanada Well-known Member
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    Exactly....what he said. If you're in Canada, Omland Heal is providing those services within the Canadian tax sphere and the current CRA frame work.
     
  17. ampp

    ampp Member

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    I won't pretend to know much about crypto taxes but I think people here are mixing up business income vs personal. If you receive it for business purposes and then have equal business expenses it's a wash. At the end of 2018 you would have spent it all on expenses and have zero business income regardless of trading. It's no different then getting paid in local currency in your country. And i'm not aware of any place where you would pay tax upon receiving a payment before work has been done... What company would operate in that country? If you leave it on your balance sheet for the fiscal year then the business needs to pay tax. But then you just write off expenses and have a lower tax bill the following year(s).
     
  18. camosoul

    camosoul Grizzled Member

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    Regulation of such overbearing methods defeats the point, and negates all the advantages for which it was invented.

    It's not so much sacreligious, as self-defeating. May as well forget the thing and go back to Fiat.

    That, of course, being the point the regulators are aiming for... Make crypto worthless by burdening it with the same failings and encumberances it was designed and invented to avoid. Undermine every key point and advantage. Then it will be worthless.
     
    #18 camosoul, Feb 28, 2018
    Last edited: Feb 28, 2018
  19. Barrett Davis

    Barrett Davis Member

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    Everything typically ends up following the same path. We're just in a simulation. :p
     
  20. younglegend

    younglegend Member

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    Why would you convert dash to btc? there are plenty ways to convert dash to usd.

    Are you trolling or you don't know income tax, capital gain tax is illegal according to constitution and free market idea?

    America has gone far from its great ideas in the beginning. And that's why cryptocurrency

    gained its popularity in spite of its infamous usage as drug money.
     
  21. Barrett Davis

    Barrett Davis Member

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    @younglegend do you mind sharing some of the ways to get DASH to USD? We know of uphold but thats about it.
     
  22. younglegend

    younglegend Member

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    You mean in usa? Don't expect many fiat gateways in usa.

    usa was the heart of all the financial problem. Most exchanges

    will try to avoid selling or buying cryptos from usa. Also if you know uphold why would you

    ask to change dash to btc?
     
  23. Lorax

    Lorax New Member

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    www.losthorizons.com

    Unless you are a federal employee, there is a 99.9% chance you do not legally owe a penny.

    I can understand this is confusing and daunting to you and you are scared to do the right thing and its not your fault. Americans have only been lied to about the income tax since it was created. So you have been conditioned to just except it as normal.

    Anyways, you can learn the Internal Revenue code and figure out where you stand on the income tax laws.

    Capital gains taxes are only owed on federal permissioned income. If you make 50k as a Starbucks manager, and put 5k into verge 1 year ago, and 2 months ago you sold for million you would not owe even $1 in capital gains taxes.

    If you leased land from the govt, cut down the timber, and made furniture, and sold the furniture for $100k, and your after expenses income is only 80k, then you would legally be required to pay federal income taxes on the 80k. Now if you also then took that 80k and made 500k in capital gain, you would also owe capital gains taxes.

    How you actually earned your original money matters as to whether or not you owe the federal govt a cut or not.

    The income tax should be called the ignorance tax.
     
  24. Nat

    Nat New Member

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    I don't think Coinbase would open a business account for this type of thing. Most merchant accounts they approve are e-commerce services selling physical goods so I would be careful relying on Coinbase to provide business account.