You just made $500,000+ in 2 months from Steem cupcake photos and secret stories.
Congratulations you are now an ideal target for a tax audit
Yes, at least in the USA the chances of tax audits rise once you get over that 250k mark.
Congratulations you now have to deal with Steem exchange risk
Okay this is not necessarily a bad thing but it requires a bit of planning. If you are like me, you may be converting most if not all of your Steem Dollars to Steem and powering it up. But if you just got awarded 5100,000+ then you are in for a huge tax bill.
In this case, you have to keep in mind that Steem Power takes 2 years to get back.
You should at least keep 60% of your Steem Dollars and let them earn interest (about 10% APR apparently), then look to start converting them into USD or Euros (or whatever) some months before taxes so that you do not move the market in one big dump.
Alternatively, if all of your SMD are converted to Steem Power, there is a more than good chance that come tax time you may be short (assuming of course that you report any of this as income and not treat it like winning money in a game of Monopoly).
I'm all in @Steem Powered Up
Well, let's say you don't care and you want to go all in. In that case I recommend that you talk to someone about creating some sort of trust or getting tax residency in some place with very low tax rates.
With your $500,000+ you're well on your way to being a multi-millionaire thanks to Steem and there are lots of places to travel in a year, write about them, and make sure not to stay long enough to establish tax residency.
Plan now and avoid having to dump your Steem Power later!!!
Disclaimer: I am not an attorney, tax advisor or accountant in any jurisdiction, please check with professionals before doing anything written in this article.
Come to New Zealand, no capital gains tax.
Plus we're too stupid to know what cryptocurrency is.
that's cool but I'll wait it out to see if you guys don't send off Kim Dotcom first to the gallows.
I can handle the IRS if I make $500,000 on Steem. But, I can't even get past $50 bucks lol.
You may think that way now, but you never know how life may turn out.
True, but I think as long as they get "their" cut it should be okay.
It depends, but generally that is correct.
Just keep at it I made $100 for some snarky comment to @kyletorpey
Funny how we have people starving, and other people can get $100 dollars for writing a sentence.
Why don't they just write "I'm starving"? I already started an #SOS (save our steemians) tag for anyone hungry.
LOL, they would if they knew they could.
I think it is because the Steem economy's Lorenz curve makes it looks like it is some oligopoly with a large pool of slave labor and virtually no middle class, it should improve as the stakes for @ned and @dan, and @dantheman and @steem and whoever else has 1%+ come down and the distribution curve is more egalitarian.
I gave you a vote. I don't have much power, but every bit helps
Lol thanks I appreciate it.
That's awesome though. I'm still waiting for it to happen to me. I comment like a mad man @johnnyyash
Interesting article, but I did not think that you could get taxed on cryptocurrencys in the US until the time comes that you actually exchange them for real fiat $USD etc.
I think cryptocurrency is treated pretty much the same was as stocks and bonds are in the US.
Well that is an interesting question. It really does depend on the situation. If someone shows up and gives you a 100 ounce bar of gold do you pay taxes on it that year or when you decide to sell it for US Dollars? :)
I would advise you to check with a tax attorney on this.
Also if I give you a bond, do you pay taxes on it in the first year? :)
Generally, it would be treated as income, unless you paid for it. This article is about people getting paid for writing articles, not people buying steem on an exchange or mining it when it was worth $0.000001.
Well quite possible, but then the gains you make on cryptocurrency could also be classed as income.
Since you have to be paid legal tender in most countries by law this is defined as the countries own fiat currency, you would think it cant be classed as income as its usually not a legal means of payment.
Now getting paid dividends from stocks is a little different, but again, this does not really apply here.
And another thing to consider is how they can tax you on something so volatile that could loose half its value in a months time?
they look on the steem blockchain and see the time stamp, then look on the price feeds that come into the steem blockchain (this determines that $ number you see near each post), and then put 2 and 2 together and figure out how much we got paid.
then go in the #introduceyourself category and get photo verification.
they don't even need to store the data in an NSA data center, it's all there on the blockchain.
blockchains are double edged sword sometimes.
That 500,000 steem dollar tax audit would be a wonderful problem to have ... i wish i had that problem haha
it surely would be
Taxation will always happen in the US or EU ( at least )
Never fear : They will find a way , it is always better to set up your fiscal residency before having any real income if you plan to skip taxes !
Good post !
Definitely worthwhile to plan for this especially in these cases where the stories remain on the steem blockchain and it is relatively easy to tie the individuals to the income (and location in many cases).
Ok everyone I'm signing off for the morning so won't be here to answer for some hours. Just remember all of your payments and #introduceyourself post are public record now.
Hello decrypt,
https://steemit.com/steemit/@jeison/sharing-brings-happiness-a-small-message-of-what-i-like-about-steemit
you made a downvote here. could you please read my comment and remove the downvote!
the guys english might not be good, but he is trying to do good!
"Transaction failed: abs_rshares > 30000000: voting weight is too small, please accumulate more voting power or steem power"
not sure why i downvoted this but anyway it seems like my downvote is inconsequential