In that case can we use the trades on Poloniex? That is information we can access and they put a format for that. The Steem Power situation is very confusing because their guidance doesn't mention anything resembling Steem Power.
In fact I read some of their paper and they mention a specific quote which generates more confusion:
SECTION 3. SCOPE
In general, the sale or exchange of convertible virtual currency,
or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.
This means what exactly? What is a "real world economy"? Is Steem considered "real world economy" or "virtual world economy" and how do we make a distinction? Does it even matter or should we assume every transaction is "real world"?
Convertible virtual currency is Bitcoin or anything like it, but they also define it as a virtual currency which has a dollar value.
Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is referred to as “convertible” virtual currency.
This would go for more than just cryptocurrency but also include anything else used as a currency in any virtual world we can think of as long as it has a dollar value? What impact does this have on gamers, or virtual worlds like Second Life?
No, people who received STEEM when it was higher won't be screwed as long as they sell it (and can report the sale at a lower price).
This is considered a capital loss, but they would be screwed by income taxes right? Capital losses are capped at some amount. As you can see I'm not a lawyer or an accountant, but neither are the vast majority of Steemians who likely are even more confused about this than I am.
Yes, you certainly can use trades on Poloniex. It is a legally recognized, sanctioned and regulated conversion market.
All three of STEEM, STEEMPOWER and SBD are convertible virtual currencies (because STEEM and SBD are traded on exchanges and STEEMPOWER is convertible to STEEM). One argument that could protect WoW players is that there are no real (i.e. legally registered and sanctioned) conversion markets like the cryptocurrency exchanges. Don't worry about "real world transactions". The mere fact that STEEM etc. is convertible means that any transaction has a real world effect.
If you are given a $20M property and then it is destroyed by fire, you aren't screwed by taxes (that'd be an awesome way to wreck your enemies if it were).
I don't see how Steem Power is a convertible virtual currency, can you send Steem Power to someone else? Is it tradeable? I don't know how that works.
Also from what I read, you cannot declare $20 million in capital loss which is exactly the problem. You can get $20 million in gain but not declare $20 million in losses. Maybe I'm interpreting things wrong, any lawyer want to clarify?
References
Steem Power is convertible to Steem.
You do DECLARE a $20 million capital loss if that is your NET loss during a year because not only can you apply $1500/$3000 per year against income but any excess will carry over to be used next year. You simply can't get a massive amount of money back from the IRS for it.
About Poloniex, I've used their info before to do my taxes. The issue is which tax form is appropriate?
Are each trade supposed to be treated as stocks? Then we need to use that form we would use for stocks which is probably what I'll end up doing for capital gains. As far as Steem goes, Steem doesn't convert into fiat anywhere does it? I don't see how it's different from WoW. You can sell your WoW item for Bitcoin and then send that to Poloniex just like you can do with Steem. You can sell entire WoW accounts or any game account in this way for Bitcoin and shapeshift it.
But before I take further steps, I'll likely contact a CPA.
Each trade is like stocks. Rewards are income.
https://steemit.com/steem/@charlieshrem/steem-token-will-be-added-to-jaxx-wallet-and-other-fiat-integrations
It's different from WoW because, as far as I know, WoW is not traded on regulated exchanges. Steem also (obviously) isn't going to get hit until after the market-cap leaders.
It's counter-intuitive but it would be better if the IRS just starting taxing BitCoin and making the rules clear. I think that the uncertainty is hurting wide cryptocurrency adoption more than taxes will.