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Crypto currency (IF banned from CA)

The Gueye Science said:
Erm... you didn't look at the thread?
Click to expand...

I don't do twitter so no, I didn't look at anything other than what you quoted.
I guess his tax liability depends on US tax law of whether earning Bitcoin in 2022 is actually classed as earnings as bitcoin isn't a legal tender in the US. I imagine he'll argue that he hasn't actually earnt a penny until he actually sells the bitcoin in exchange for US dollars. That would be his true taxable event.

I don't know how US tax laws work though.
 
Buzz Lightroom said:
I don't do twitter so no, I didn't look at anything other than what you quoted.
I guess his tax liability depends on US tax law of whether earning Bitcoin in 2022 is actually classed as earnings as bitcoin isn't a legal tender in the US. I imagine he'll argue that he hasn't actually earnt a penny until he actually sells the bitcoin in exchange for US dollars. That would be his true taxable event.

I don't know how US tax laws work though.
Click to expand...
I’m not an accountant but do pay both federal and California state taxes so unfortunately do have some experience of its complexity!

Closest analogy I’m familiar with would be stock options ie company gives you an option to buy a certain # of shares of the stock at a set price. If you exercise that option on that date you incur a taxable event and you will also incur another taxable event when you sell as well.

Obviously depends on the exact details of how he took the payment but on my limited understanding it does look like he is going to have to pay taxes on it. Of course he has other resources, many day-traders who have been trading the past year in taxable accounts and are underwater aren’t as fortunate.
 
Did a little research and my reading of this is that pretty clear Odell will be liable for taxes, both federal and state, on the value at the time he got paid Bitcoin.

Internal Revenue Bulletin: 2014-16 | Internal Revenue Service

www.irs.gov www.irs.gov
Q–3: Must a taxpayer who receives virtual currency as payment for goods or services include in computing gross income the fair market value of the virtual currency?

A–3: Yes. A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received. See Publication 525, Taxable and Nontaxable Income, for more information on miscellaneous income from exchanges involving property or services.
 
LinekersLegs said:
Did a little research and my reading of this is that pretty clear Odell will be liable for taxes, both federal and state, on the value at the time he got paid Bitcoin.

Internal Revenue Bulletin: 2014-16 | Internal Revenue Service

www.irs.gov www.irs.gov
Q–3: Must a taxpayer who receives virtual currency as payment for goods or services include in computing gross income the fair market value of the virtual currency?

A–3: Yes. A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received. See Publication 525, Taxable and Nontaxable Income, for more information on miscellaneous income from exchanges involving property or services.
Click to expand...
All sounding abit messy
 


Buzz Lightroom said:
If he holds on to the bitcoin for another couple of years or more it could work out to be the best financial decision he's ever made. Crypto may have taken a nosedive over the last 2 or 3 months but longterm it will still has a long way to go up.
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I know this is not a popular opinion with the many of people that have invested in bitcoin but I really hope this crypto currency comes to an end. For me it is absurd the amount of energy that is being spent mining for bitcoins. It just makes no sense to aggravate climate change so people can have access to a crypto currency, specially given how dire the situation is at the moment when it comes to climate change. For anyone in denial on how bad bitcoin is for the environment here is a good reading for you.

news.climate.columbia.edu

Bitcoin’s Impacts on Climate and the Environment

The cryptocurrency’s high value comes at a high cost to the planet.
news.climate.columbia.edu news.climate.columbia.edu
 

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