Morning steemians, In the last post on crypto taxation we featured, we discussed an analogy of children, bullies and pebbles. Let's continue to explore further and read what the bullies have say. Check out the following wisdom, coming from the ones who should be smart enough to lead a country.
In sum, taxpayers must track their cryptocurrency purchases carefully. Each cryptocurrency purchase should be kept in a separate online wallet and appropriate records should be maintained to document when the wallet was established. If a taxpayer uses an account with several different wallet addresses and that account is later combined into a single wallet, it may become difficult to determine the original basis of each cryptocurrency that is used in a subsequent transaction.
Hello? "Every purchase in a separate wallet"? Do we use a different wallet every time we shop in a mall? We all got to love this part: "it may become difficult".
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This one is also brimming with wisdom:
In summary, if a taxpayer acquires cryptocurrency as an investment and chooses to dispose of it by purchasing merchandise or services, any loss realized will be treated as a deductible investment loss. However, at times, it may be difficult to determine whether cryptocurrency is held for investment or personal purposes.
And yet again: "it may be difficult...". Is this another way of saying "impossible to impose and we'll decide for you whatever we deem appropriate"?
To be able to follow the "accounting instructions", every cryptopreneur needs to hire an army of paper pushers, whose only job would be to make sure that every transaction is done in a separate wallet and determine (on account of what?) if crypto transaction is investment or whatever they actually consider "personal purposes". However, not even an entire army of paper pushers may assure that it will be done correctly! The interpretations are too wide, vague and inaccurate. For example: What about a failed transaction resulting in a loss or will losing of a private password, and the entire stash along with it, be tax deductible? Will we be able to deduct such insufferable crypto loss from the overall fiat* tax that we're paying every year?
Yeah, right...
It all makes us really pleased to see that the old bloodsucking system cannot find a way to continue its wretched practices. The nonsense of imposing the rule through financial control of free individuals must and will be replaced by a system that will not propel unjust taxation of individuals in order to support non-productive government officials and their crypto witch hunts.
According to the Notice, virtual currency is treated as property for federal tax purposes. This means that, depending on the taxpayer's circumstances, cryptocurrencies, such as Bitcoin, can be classified as business property, investment property, or personal property.
Property? Really? Can someone explain how can a non-governed, virtual asset be labelled a property? This is less reasonable than taxing people for gathering pebbles on a beach, proclaiming them legal property and making people pay real money for owning a bunch of pebbles. If we all start collecting dog shit and start adding a virtual value to it, will dog shit soon be proclaimed a property and be taxed?
Why not start taxing "property" in Second Life and other online games...?
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Why would one pay tax on crypto gains in fiat money if the regular tax cannot be paid in crypto? It seems that we are all considered fools when it suits the governments. In worst case scenario, the taxes on crypto should be payable in crypto. But, which government will take a non-legal tender 'property' as a regular tax? None! :D Why? Because crypto is not money, right? But they still want us to pay tax on gains on something that is not accepted as means of payment!
How about accepting pebbles or dog shit for tax, instead?
However...
We understand how the system works. Regular taxing of the fiat money income, taken out of crypto, is in order. We don't mind paying taxes, we only mind being considered fools. As soon as crypto becomes a worldwide legal tender and is widely accepted as means of payment for goods and services, take your tax on crypto earnings, by all means.
But, we cannot mix apples and oranges, the tax needs to be payable in crypto.
"Equal justice Under Law!"
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