Home Altcoins News Vitalik Buterin of Ethereum (ETH) Unsolicited Funds Donations and Tax Implication

Vitalik Buterin of Ethereum (ETH) Unsolicited Funds Donations and Tax Implication

Vitalik Tax Donations

When talking about Vitalik Buterin’s unsolicited funds and donation matter, Charles Hoskinson recently tweeted:  “But doesn’t donating a billion dollars of an asset mean you first had to take custody and realize its value to donate? Wouldn’t that trigger a tax event? Not sure how credits and write-offs work up north. Asking for a friend.”

Charles’s Video in this regard points to how:

“This is especially true for proponents of wealth tax.  So, if you have more than 50 million dollars of assets or 100 million dollars of assets, you should pay 5% of your wealth every year to the government.  So, Elizabeth Warren, for example, is one of the Wealth-tax pushers.

Well, technically, one could have hypothetically hundreds and millions and billions of dollars’ worth in crypto, but let us see that crypto has no liquidity. So, you actually owe a lot, but you actually don’t have the ability to realize that.

Arguments especially for people who hold illiquid securities, but cryptocurrencies are not generally treated as securities for tax purposes. Nor do they treat it like commodities or other things. So, all the tax structures that we enjoyed in the 20th century, from stock options and other things, don’t work in cryptocurrency.

If a tax lawyer from Canadian or US jurisdiction could comment on this, I am really curious to see how it works in that system.

And, in general, has this actually ever come up before.  It is such a large amount of money; it is something that a tax authorities has to try to care about “over a billion dollars of assets transferring” even though we all know that is not really billion dollars because when many of you start selling that when the price collapses. So, maybe the fair market value is something else. However, how do you then account for fair market value for a semi-liquid asset that is trading.”

Onlookers felt:  This is a very interesting legal study that will prompt discussion and why regulation is a good thing in sparing amounts.

Others about the Vitalik matter stated, surely, if someone forces money on to you, it’s not the same as you receiving money. Vitalik couldn’t prevent that money from coming to his account, so he sent it away. It’s like if you are forced to commit a criminal act, you would probably be OK.

One of the lawyers tweeted:  “4 tax classes and some experience with complex returns. Gifts can be rejected by recipients. The valuation can be challenged by IRS; taxpayer lists whatever they can justify. Many acceptable methods exist. Liquidity isn’t really a consideration.”

Perhaps, this implies that Vitalik Accepted the unsolicited funds by his implied activity.

May be Vitalik could have chosen to decline the gift and purposely destroy the cryptocurrency by sending it to an incorrect wallet address. It would then be considered a loss for the year. However, he tried to make some use of it.

It looks like people are going to create more of such coins and dump the burden on him.

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Maheen Hernandez

A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5

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