Fireside Chat: Crypto Taxes with Cameron Browne | GM Farcaster Special Event

yeah yeah yeah yeah given given the accent yes well we'll be seeking american us tax policy

yeah we'll keep it we'll keep it tight my name is cameron i'm a cpa tax practitioner and partner here at daring advisors i've been working in the web three cryptocurrency space to tax practitioners since 2017 through this whole i think sorry through daring advisors since 2021 so major on chain compliance transactional work you know planning navigating you know hyper liquid air drops all the fun stuff has been our cup of tea and very excited for today's conversation

yeah i would say our north is just on this industry itself so anybody that has exposure to web three digital assets cryptocurrency can which can range from contributors so work a lot of like small business freelancers whatnot we do a lot of work with foundations startups high net worth individuals investors basically if it's an aspect of your portfolio we're open to a conversation as long as the right vibe and fit

yeah i would say nothing as far as like the actual how we do taxes this year for the 2024 has changed so no law came into place no policy the effect of the 2024 tax year so business as usual apart from all the crazy upgrades and activities on chain however most of the stuff has been prospective so starting this year there's been a lot of stuff a lot of fud around crypto twitter crypto crypto forecast is on like the basically wall by wall tracking so revenue procedure twenty twenty four twenty eight this is actually our first like real hard law impacting crypto and digital asset reporting in the states we're now for custodial basically for custodial assets so ad exchanges we're tracking this by wall by wall and also too for self custody wallets we're treating this by wall by wall so what that means is when you're actually selling transactions or sorry selling assets if that eth is within this wallet like the one sign of the transactions the one essentially the the basket where before you could say actually i'm gonna sell this eth located in my coinbase account or my kraken account on a portfolio basis so it's more just kinda like tracking various lots within the various locations but there's still some some stuff that's open to determination of what's a wallet is it actually like the address level or is it the seed is it the front end etcetera so more to come and the other stuff too affecting this year and going forward is the brokerage reporting which does really affect a lot of investors it's mostly on the protocol the start up the the broker dealers where if you custody or manage funds for folks there are just short reported requirements here this year but thankfully that's all 2025 problem although we're here but we're looking rest retrospectively for tax considerations

yeah so the irs views cryptocurrency as property and the earning of receipt to property is taxable at the fair market value at the time of receipt so if someone sent you 1 eth eth is around $3,100 you've now recognized $3,100 of income if you are a sole proprietor a freelancer there's also you know federal state as well as potentially self employment tax associated with that transaction but at the very least we've got an income tax event and then say you know tomorrow you turn around and sell that $1.08 for 3,500 you've now recognized ordinary income of 31 and then capital gains of 400 to make up that difference so there's been potentially two tax events the receipt and the ultimate liquidation of that asset

about it as my as my mom would say it tough shit sherlock in the case of the the unfortunate part is that ordinary income the capital losses can't offset it so it's something where it's the kind of inherent danger or risk with transacting in cryptocurrency is that you could accept that eth at 3,100 tomorrow price could drop to 25 but you can't offset that loss against the ordinary income so it's very important as a strategy for those that are earning on chain whether they're contributing consulting just even doing yield farming defi is essentially locking away a portion for tax reserves because there's an inherent like shoulda coulda woulda like i've got the asset it's depreciated i can't even sell it to pay the taxes let alone offset that original income which yeah something we saw a lot you know when the bowl was starting to subside '21 to 2022 we had a lot of clients in seoul they recognized income at hundred and $81.90 it was certainly not that there the january nor let alone april 15 so very important in good financial housekeeping to at least think about that and plan for that future upcoming tax bill yeah

well i would say so kind of like walking through it is if you saw a portion usdc like hey like my effective tax rate's 25% you know 35 40 percent if you're in new york or california you swap that portion into usdc and kinda lock it away then yeah you're kind of like free and clear in house money and it kinda like covers the tax obligation but it still opens you up to if you buy rebuy that eth it still depreciates you've got a capital loss but at the very least you've got some you know a tax reserve or cash flow planning for it so it is good like a good practice i'd like to say like rule of thumb is 25% twenty % depending on where you're based up just safeguarding usdc heck if you're earning like a protocol you know token project token swap it back to eth and lock in lease that principle because there is a lot of volatility in the market as you can all imagine

no in the case of selling nfts so if you are like the original like say you have a deployer wallet you've launched a smart contract you're in control of the nft that actual minting or selling to the public is similar to like doing consultancy contributing tax pulls ordinary income with the time of receipt but if you like bought nft sold nft that's just all capital gains which is similar to you know trading and swapping other fungibles or just other digital assets and cryptocurrencies there was i did see something about this past week that there's been signaling at least from the sec to treat nfts and potentially meme coins as collectibles which means they could be benefits of different you know basically property trying or basically property treatment and not just kinda like general property like houses but it could be eligible for section 10 to do in exchanges differential tax rates at the collectible level and that be true is just regular old property so there are some things that are seen signal by the administration but still tbd

yeah if you know if a project just sends you like hey here's $50 usdc go build something the how the irs views us because it's been transferred to you and you've received all rights of it then it is income if there's like a fulfillment clause a refund clause like hey if we don't complete phase two of this this this development schedule it'd be refunded in that case you could argue that all of it is taxable at once need accrual accrual based accounting but if it's essentially received free and clear with no obligation return and it's yours it's gonna be treated as income

there there's a concept of materiality same here for us like when we do our reporting we're not doing a % accuracy we're doing a degree of confidence whether it's 95 90 seven depends on the ultimate transactions but i'm not gonna go through and verify that every single you know fraction of any transaction is correct but we're gonna focus on the big ones so we've had in cases for clients that are like you know dabbling or hey i was off last year they got a few sales fantastic we don't need to report or maybe just check the box but if there is you know it all depends on activity couple hundred bucks iris isn't gonna sweat couple hundred thousand dollars different you know different thing of all the better

yeah so we're getting kind of this could the concept actual versus constructive receipt so we're extrapolating from what the irs has determined for other types of assets or with the receipt

in the case of like let's let's imagine it's not eth but let's say it's a hundred bucks right so i put a benjamin right on the table and it's there it's been essentially constructed to receive it's made available to you but you're not taken off the table when you take it off the table and put in your pocket that's actual receipts so the irs views that construct a receipt is technically taxable so in the case it's been made available to you it's claimable it's therefore taxable now that you know smart contract or that front end isn't controlled by you so we would view that once you actually claim it and take that nft that airdrop or whatever it is into your wallet and therefore you can sell it exchange it send it to friends etcetera at that point in time it's been claimed and therefore it's income so that's it it's how we we typically view it but the irs in the case of an audit or review could determine hey it's when it's been accrued to you made available to you and therefore it's taxable but most tax softwares will defer upon what's actually claimed and into a wall under dominion control

it's something where we're kinda getting the concept like what is like what is the fair market value of it and especially like in the first day like a lot of tax softwares won't even pull in for like four or six hours after launch because there's there's so much fluctuation in the first hours or there's just not a lot of depth of liquidity so like what is the fair market value if we've got a very small subset of transactions so we'll kinda defer to what the you know basically coinmarketcap coingecko will state and say yep if there's a value that's like fairly reasonable that's income i know you know we were talking off you know beforehand about hyper liquid before we we started this the stream today but in the case of hyper liquid that was interesting one where it was actually like dropped out to people's wallets and then they launched liquidity after the fact so if there's not liquidity there can't be a price because there's no marketplace for it so it actually was made available to folks before it was actually taxable so depending on the mechanics of the airdrop whether it's claim whether it's just automatically drop before this liquidity or secondary sales or anything of that sort really affects what taxable event is but we typically defer to when it's actually claimed or received as an income generated event at what value to be determined

then in that case we're just looking at a % capital gains right so this is also very common for folks that are contributing to projects they may get a token grant you know invested token units token options as far as their efforts contributing to a dollar project they'll file what's considered a eighty three b election which goes hey i'm getting granted these mythical internet monies here before it's even a you know chains launched or there's even a tge of any sort or token generation event so we go cool i'm getting a hundred thousand dollars of magic in our money that you know the evaluators are saying is nothing i declare it as income and then when it actually unlocks and i get it i'm not recognized as taxable bank because i've already declared it i've already said it's mine and then we're looking at pure you know capital gain treatment or if it's been held up for a year long term capital gains so the 83 b is a a huge tool when you're you know actually fighting services in relation for crypto but the same thing applies to you know receiving air drops payment you know and tokens where there's no liquidity no price or the market hasn't made yet we're gonna recognize that $0 of income and then pure capital gains

that's a great idea dusting potentially different so in that case we've we've viewed on a case by case basis for our clients so in the case of like someone just gets dusted some random coins you know or something then yeah like we might treat as income but by default though if you haven't used it you haven't interact the contract you haven't traded it you actually haven't like derived the full value it could be the argument it is not taxable someone just shove some money in your pocket so to speak it depends on what you do with that money after you get it if you just sit there and let it wilt and and rot away then yeah probably not taxable but if you actually take it and use it most likely income

not really it's gonna be income regardless it's just a matter of like what you got to get it like could it be if it's in a business is it part of like your actual blood sweat and efforts and then for we're talking about payroll tax considerations but if you receive something it's gonna be income whether it's you know someone hands you a gold bar someone hands you a car or crypto like whatever that be if you've received something most likely income unless it's a gift but no one's out here just gifting out of the goodness there you know i mean in certain projects sure but no one's just gifting for the goodness of their hearts yeah

but i

more with the attributes yeah because essentially and and it's it's weird i mean for everything when we're swapping exchange it's pretty easy because you can just like point to whatever you know random oracles coin gecko says but when we're gifting it may require like evaluate evaluation or appraisal so anything over 500 or $5,000 if you donate it like requires an appraisal even though it's like hey i know the price of bitcoin pretty easily i can point to it it still needs a rubber stamp saying yes it is the price of that that day by an affirmed appraiser so that's something to kinda think about but for income we're we're pretty easy in that world because we just recognize it

years i i feel like you know administrative policy is gonna be more of a laissez faire attitude it's just reductions reducing clarity and trying to like incentivize you know basically american made it's very much like america first overall so as far as like encouraging so like we there was a domestic production activities credit dpad that we lost back in 2017 that kind of like was incentivizing businesses producing manufacturing onshore kinda like r and d but for for hard businesses i see also like potential rates reductions at the corporate level individual level even just different classifications for certain assets there's also been signaling sorry for anything like launched developed onshore like the made in america stamp could be essentially exempt or reduce tax rates across the board so i i'm overall optimistic but what do you think will will i will we see clarity as far as like what is this random uniswap v three vault like is this taxable here or there like most likely when we get through like a revenue like an examination with a revenue agent i don't think tax policy will be focused on transactional it's gonna let the courts decide that we figure out how the heck to do these things which is unfortunate to the taxpayer even the tax practitioners are trying to like muddy through but overall though i see like a more like onshoring of these types of activities trying to claim revenue trying to adopt it and bring it in the american system but as far as like how we treat like staking it's gonna be arguing courts

yeah well it was something too that there was a a pretty good thought leader out there jason schwartz at freak frank he's like cryptotaxguy.eath he was talking about even just the definition of a wallet like the treasury is confused because like on twitter people use wallet it's like is it like my wallet address is it the actual seed is it like front ends like i can also have a a hot and a cold wallet my metamask and my robbie like is that the same and by this confusion the term of what is a wallet like the treasury adopted it which then makes ambiguity of how we implement this rule so i don't think the irs and treasury quite i mean they obviously understand to the degree what it is but when we're talking you know we're we know we're we're in various you know radium pools we're we're doing stuff on jito or anything else out there it's a bit further down you know what is morpho right like i don't expect the average revenue officer to understand what the heck morpho is

beautifully but actually no

this is something that's also confused the irs for the better and i were like here's my like crypto cpa hat we'll take it off in a second so like cpa fiduciary you know obviously someone else in the irc is that the irs back in 2023 said that staking is taxable so you receive the tokens it's taxable right now there's a conversation we had i'm taking this hat off and like thinking about this more theoretical so myself fenwick a few other tax lawyers out there fred frank jason schwartz view that you know at least native staking so we're staking with you know solana you know we have our beacon chain rewards where you know actually participating as a as a validator or delegated staking there could be argument that this is newly created property just the machinations of the block going like this and i'm just getting a cut every single time this newly created property much analogous to like you know the bamboo grows i cut the bamboo it just keeps kinda coming out of this initial thing but it's not like coming from anybody that differs in the case of like venice ai with the vuv token is that there's a counterparty the protocol the project somebody sent you some tokens which means that it's taxable to you and also deductible or relationship much like bank pays you interest you receive interest that's taxable and have you typically view protocol staking lending yield farming etcetera as taxable in that case now whether you actually receive the words like that's a taxable event or if it's auto compounded within the smart contract or a token b token whatever the version of that is in that case until you actually liquidate it then your taxable gain of a hit so it depends on how the staking mechanism is designed for the protocol or project level but so but by default like most likely taxable in the case of you know native staking delegated staking you're a validator it's a discussion

bit lower so if you're trading crypto i mean like for more like novice or amateur investors like you can use like coinly cointracker awaken crypto tax calculator really just pick your poison as far as the tool it runs it through it will generate after reconcile a bit or clean up a little bit what's considered a form eighty nine forty nine so that's the detailed list of all your capital gains transactions the past year that feeds up into schedule d which is your summary from both that as well as anything from partnerships downstream etcetera and that flows back into your ten forty the same applies for car corporations partnerships the capital gains report on your personal or corporate income tax return

yeah and and thankfully like swaps and purchases like most tax softwares scrap pretty easily because they go one asset in one asset out pretty easy it's when you start to like interact on chain so if you know you're you know you're locking up an lp you're staking that lp you're then restaking lp you're transferring you're bridging like that's where softwares can come an issue depending upon what tokens you're transferring what you receive on the other chain or other network or just you know the case of just regular defies it's just protocols that aren't supported by by various chains so we've had a lot of fun with pumped up fund the past few months we're trying to like and then people are staking in on various rating pools like are the rating pools recognized and then receiving emissions so that's been a joy but you know if you're just like buying and selling a coinbase account you're doing some swaps to your metamask or robbie wallet you're not gonna be any worse for where

yeah so what is tax loss harvesting so first and foremost because cryptocurrency is property it's on a security we get to have fun special tax treatment which means wash sale rules do not apply so something the previous administration was talking about of like this crypto tax loophole this was it is that you could theoretically like sell your eth wash it recognize the loss and the next block pick it back up reset your basis and go forward because cryptocurrency is property you can do this without really any issue so you know periodically like market swings i'll personally do this i'll just reset my positions or at year end you're looking to have our portfolio you're trying to burn lose trade basically to recognize these paper losses because on the upswing when you're going from token to token you're receiving rewards you're generating a lot of like paper income or paper capital gains that you wish you had this for so just the very nature of interacting on chain like simple as simple as like hey i've got some wheat i wanna take that wheat and open up a wbtc wheat pool i've gotta swap part of my wheat into rip back rep bitcoin recognize a capital gains event just open up the lp position so that's something that does happen on the flip side we wanna make sure we're recognizing more losses to offset those phantom gains although you're opening up so that's something that's important to do on a periodic basis and in the case of like nfts and all it takes you know if you've got some worthless ones you know send it to a null address so 0000000 and get off your wallet it just needs to be outside your control and realize it can't just be sitting there and saying i'm gonna take a loss on this random like worthless nft meme coin etcetera it's gotta be actual traded swapped or burnt

all the all the same so fungibles non fungibles heck if you buy like various degrees of gold at certain prices like it's property so we're allowed to loss harvest our property

and or what and i've had some people run it by me like yo okay just send to my friend and like trade back and forth and it's like arms length like it has to be like you don't know each other in the streets there are like platforms out there where it's like coming in front of mine but like where you can just like send your nft to them they recognize the loss for you and it's out of your side of your control it's been essentially converted but yeah it can't just sit there you can't just sell it to your mom it's gotta be at arm's length

yeah exactly and it's something where i mean there's a joke among stacks officials you know it's a it's a very good joke but like meme coins nfts are great for loss harvesting because like ninety seven ninety eight go down which means they're all they're right to actually sell and liquidate so it's for it's for the project for the for the memes right but apart from that though yeah it's most people end up you know either break even or or in a net loss position on those

there's no judgment no judgment yeah yeah

yeah no totally different so the actual like emissions or fees you're receiving as lps those are taxable income just like if you were minting off nfts if you're receiving like commissions or royalties from subsequent sales you're getting paid a commission of that like it's taxable as income now in the case of lps go ahead adrian

it's a yield emissions income commission kind of interchangeably but essentially what you're earning for either providing liquidity providing tokens providing services i would say is emissions

i i don't i don't i didn't create the lingo but i'll go with it

is this the mission yeah

it as like the actual like fracking of all the emissions coming out of the fracking that's what i think about is the actual events itself so

it depends we have 200 and

yeah so i would say so the case of lps is gets fun is you know by default i gotta think about this like what's happening on chain right so if i have this week in usdc i am then depositing the liquidity pool and then receiving an lp token return now that could be viewed as an exchange of like i'm taking like my week and my uscc i'm getting 50% of the lp token based on the lp token for it and that's a taxable event because i'm exchanging those two assets for the lp which is representation or share or interest in that pool which is kind of a batch of all these various tokens and then when i leave the lp i get those assets back i recognize a capital gain or loss on my lp when it's been opened and then i get bounced back at the fair market value at the time of receipt that's what most softwares will default to i do know that within coin tracking as well as in crypto tax calculator there's the option to kind of like know and treat lps as nontaxable and kind of the theory behind that is like i also can see this i mean it's how i view my own portfolio but you know do your own research is that i view it as like if i'm contributing both these into a pool i i still have a representational 50% of these assets and i'm getting these back and then whatever i get back the delta between what i originally contributed is that capital gains event so i'm still getting back the same equivalent amount of lead or usdc minus a change or whatever happened within that pool that's something that is subject to interpretation discussion certainly examination at a later point in time but certainly both arguments we have but the more conservative would be to treat those as taxable upon entry and taxable upon exit and then with the emissions if there's like an auto compounder mechanism to it where the rewards get received they get bought back swapped into you know 50% of 50% redeposit back in the pool if it's something that's kind of outside your control through a bot where it's not really living within your wallet you're not manually push the button i could see that's not taxable it's like an auto compounding mechanism but that's why we see like in the case of like staking we've got liquid staking tokens right that automatically do this for us they take the rewards put it back into the token which increase the overall value in the position but i can say i didn't touch anything i didn't receive any of the rewards so the flip side is like if i receive them i deposit back in the lp pool like potentially tax because i've had the dominion i received them i could've sent them out of the wall i could've withdrawn them i could've exchanged them i just chose them back in the lp so to be determined but i've you know with clients depending upon the risk preference what as as far as like the overall pool we've taken both approaches

year i mean the deal deal you can it's only so many different ways to do a cdp or a a vault or like a liquidity pool to a degree but we're seeing now more and more is like you know isolated ecosystems like prop chains or like you know hyper liquid or like d y d x where like they have their own ecosystem their own activities their own trades that exist outside of the typical evm etherscan ecosystem where you kinda plug into and see what the hell is going on so that's happening more and more that's that's that's the more like common approach these days but as far as like changing what the heck we're investing on on chain there hasn't been too much craziness apart from the existing models set up back in 2122

hyper liquid was big yep and then meme coins went crazy and that was it's where we're kinda chasing just like new protocols or new ways like functionally the same transactions are there like swapping bridging l p ing wrapping vaulting staking etcetera it's a matter of like who's doing it now and do our tax software support it

yeah i mean we we typically treat like vaults as long as it's like a a single asset vault so one to one like a wheat vault and like some some sort of like pendo was great about this for yield with that various different degrees but like you're just still contributing like wheat or eth into it or where the native asset is so in that case we typically view it as a a non tax one tree and then certainly the rewards you're earning are taxable but the actual swapping from your wheat into like a pendle version a more for version of wheat and earning those yields not taxable it's kinda the same thing with like take a dive back with more boomer defi with aave with a tokens it's like you've got with and now you have like aweth which essentially the same thing it just allows you to earn interest they are different trans sorry different tokens different addresses on chain and therefore it could be argued there's a swap but they're functioning the same just one allows you to earn interest you know just like you know if you deposit your usd in chase you now get chase usd but that allows you to earn interest in return that's kind of the same methodology we view it

or does he

yep and that kinda goes back with with the positional nfts see with with uniswap v three where you're actually like you're not just like a an lp token return but actually representational nft like each position is its own lot and that's one where we've we typically seen it as like a little bit harder case to argue like back when uniswap v two like you'd actually see both assets go out and go into the lp then you get this lp token of return that was a representation or like your redemption where you could say hey i'm gonna burn this and get my tokens back now in the case of these nfts it's kind of the same methodology but it could be argued that you are swapping both these for the nft and and like i said before the nft appreciates depreciates with the underlying the underlying basket within it that supports it and then you recognize a capital gain or loss upon the nft position so we've kinda leaned on the more conservative treatment as of as of recent but you know for certain clients certain cases open to that discussion

no no it's basically ordinary income and capital gains covers everything it's just kind of like when we're recognizing it and something that is like is it in inner north of our firm myself is like i understand that like yes the the current tax code recognizes like property to property so fungible for fungible asset for asset is taxable like going from like with to aave as a taxable event but like i've got a wife and three kids like that aave can't buy diapers right so like although it is a you're agreeing agreeing value it's like that value can't be turned around and spent it's gotta be i mean it can be invested it can be deployed it can be wrapped it can be earned but like you're actually getting concrete value that can be put here in the in the overall tangible space so there are certain you know things where i can i can certainly understand it but like the current tax code of how they view it is almost detrimental in certain aspects which i think it's also great now that we're even seeing from the sdc level of like allowing potentially in kind redemptions for the etfs of like i can actually own bitcoin if i want the etf have it custody have which is again against the ethos of you know a personal ecosystem or the economy but in that case if i wanna have custody i can give my b t btc to them and not recognize the capital event so that's something i think is kind of getting there but we're still in this weird like who knows shifting sands is the irs gonna be more enforcement are they not are they still clueless in general though what we're seeing from the agency is a lot of focus on just like unreported transactions that's easy like if you didn't check the box they find out from kraken coinbase you had sales like they're gonna pursue it but i haven't seen yet from my clients yet knock on wood of any like examinations based upon the substance of transactions like is staking taxable is this lp taxable is my you know aave earnings is that swapping their taxable or not so it's mostly focused on noncompliance which they've got plenty of their workout cut out for them rather than focus on the more technical transactional issues but things could change as well minus the news of taking those 88 enforcement agents to put them at the border which we'll see how that goes but the irs is gonna be a a bit understaffed here going forward unfortunately

yeah jail automatically go no

yeah it's it's a scandinavian jail not not not latin american jail no jokes aside is there are two different ways of of understatements or underreporting so there is a significant mistake or understatement which is 25% of your income and then everything else below that so in the case of a significant misstatement the statute of limitations is six years which means the irs has six years to figure out how much you underpaid declare it issue the report and go find go find it or actually start the examination so if you you know back in 2021 you forgot to declare you know a thousand dollar airdrop we don't we don't care it's unless you know a thousand dollars was 25% of your $4 of income then yeah we probably care but in that case you're smaller

exactly so let's say for for most i mean like it was there was a statistic i think it was '21 or '22 that like only 2,000,000 or so like taxpayers check the box that they acquired crypto but like a coinbase report was like 35 or 40,000,000 so there's a huge gap of like people just running with it and just going for good luck as opposed to actually doing compliance so the very fact we're here having a conversation you may be filing inclusive crypto data puts a lot of people ahead of most most people not saying that like you that's good enough like you shoot better than good obviously people working in the space but not you know i wouldn't sweat you know hey i actually misclassified this or hey this is missing here unless you're it's a known misstatement and as far as like penalization like hey you may have missed a wallet it was just imported correctly they calculate the finding you know typically it's gonna be just assess the tax maybe penalties maybe interest just depends upon the nature like if you just willingly and negligently didn't include it you're gonna get with penalties and interest potential criminal penalties if it was like hey i didn't know the the tools weren't there i was on tezos back in 2019 no one can really fault in that case so it depends on your your best effort in good faith which although the agency is just like mythical bureaucratic organization every single revenue officer is a human so trying to understand explain the narrative how we got to that point really really helps in any sort of case with that being said though there's been a lot of chatter about sixty one seventy three letters so we had a a client's friend received this which is basically the irs is saying hey we we think you may have unreported transactions it's not a finding it's on examination it's on audit it's just kind of like a hey let us know to get ahead of it but there was some a couple other thought leaders clinton donnelly as well as andrew gordon out there tax tax attorneys were saying like do not sign and send this in because it opens you up to examination whereas if you just don't respond to it you're not saying it's kinda like fleet of the fifth it's like i'm not saying or not like basically do your own dirty work i'm not gonna put it up for you

exactly and given that they're understaffed and and whatnot that's a lot of burden so unless there's a known mistake that you should probably get taken care of and and get ahead of it before there actually is an issue but yeah should people assume go ahead

i suspect that they have something i do what they do have though is certainly exchange data so any like even though data is you know mandatory here until 2025 and 2026 for brokers and exchanges here in onshore through findings through through hacks etcetera or through through their work previously like we've had clients like have their data from kraken or coinbase to report to the irs or they're aware of it through some i think it was with the sec's investigation they did they're able to obtain this kind of data so there has been some findings but as far as like doing analytics i would say potentially if they see some things there they may do some tracing i've also seen like canada's cra actually start to attribute income and do finding and saying hey we think these addresses are likely associated with your accounts provely's aren't yours and that's unfair very you know very aggressive but that's not to say that things could change but i also think the regulatory climate is different with the us's irs versus the cra even the uk's hmrc the australia's ato so i don't want to see that but if someone's coming down with the examination they're probably gonna deploy the full the full tools of it to figure out what the hell they actually owe so

chainalysis does exist but i wouldn't say like a broad like everyone's getting surveyed because it's a lot of resources a lot of analytics and we're doing this as like experienced professionals we still sometimes can't make sense of client portfolio so i can only imagine what the hell is going on at the irs' level sometimes yeah

yep yep

yeah yeah i most recently i consents as i spoke with a couple of the irs ci so criminal enforcements the criminal enforcement arm and again a lot of their stuff is just focused on bad actors noncompliance people that just like substantial understates like who was it the bitcoin king or guy that like fled and was fed tax evasion brexit tax like they're focused the more notable cases people that are flaunting that you know hey they launch a main coin go out and buy a ferrari like yeah you're probably gonna get audited because they're also not preparing their taxes correctly in the first place but as far as like you know just pursuing individuals to be punitive i don't see that even the tezos case was staking was brought upon by the jairus themselves a lot of it's just like i said on enforcement actions people that did not report that likely of income and it's something i i like to you know say in jess sometimes it's like it wasn't the fact that you know capone was you know selling alcohol illegally and bootlegging her in prohibition he could sell he just needs to pay his dues so the irs is kind of like amoral in that regard so if you're earning something doesn't matter the fashion the form they wanna earn their due and if you're not reporting it they're gonna want their share so but overall though i don't see it as like a very like toothy agency i think you know from what i was talking with them at consensus this past may is it more just kinda like seeing where the scc the cftc like what the heck do we treat these things at at the federal level which then enforce us to like hey how do we treat them how do we calculate them and start to go on a more transactional nature but if you're buying and swapping to report it you're gonna have a you know potentially maybe an unfortunate call or notice down the road

oh no and it's and it's something it it make my job so much easier because we're we're playing like crystal ball reading the tea leaves hey for this random dapper protocol on base or bear or whatever like we should treat it this way and we're looking very much like not seeing the forest this recent times because we we have to in certain cases and truthfully having like sensible like code and not something from the nineteen eighties it was the most recent refresh in term revenue code minus bills and stuff through congress the past forty odd years i would greatly appreciate it so we can actually like be more proactive and form our clients and start taking positions just like we know how houses are treated we know it's like to treat the businesses selling you know selling liquidating shares income etcetera but like when it comes to these transactions here's guidance here's faqs which at the end of the day aren't really bind to the taxpayer or practitioner it's binding to the irs if they see these on a return so there's certain like faqs and guidance that are certainly like a little more like sticky and there's other ones where like yeah you're you know you're chancing it like you're good luck trying to prove that in court but prove it against the irs against the irs tax courts

yeah always wrap it which is good in the case of a dao so having some sort of physical wrapper to exist whether it's a foundation a corp onshore offshore but at least we have something to work with because if not and we have a dao we have an association which an association by default with us members just like someone here at the dao specialist said is a general partnership which not only means unlimited liability but also taxable income if you maybe not touching it for each individual partner themselves so having some sort of vehicle to wrap the dao whether it's a corp whether it's an oona whether we're actually having some sort of vehicle to say this exist outside of myself as a person as collection because you know an association can be an oona which is an unincorporated nonprofit association we've come across you know herda was one of this until they finally got recognized and a few other clients they come together they receive a grant they wanna deploy a grant but until you receive permission from the irs to act as nonprofit you're for profit and a for profit uno is an association which is taxable as a partnership so it is very you know at least again materiality speaking you're getting a grant from you know nouns ens getcoin for $15 you go and deploy it pay yourselves great probably not worth kinda frightened about but if you're getting you know a hundred thousand dollar retro grants $250 now you have a treasury to manage there's more liability more risk you're gonna wanna have some sort of wrapper for that vehicle

yeah yeah so i'm on twitter zero x crypto tax on farcaster as zero or just as one a co which is my favorite channel in south america and then our website for crypto or for our web for affirm sorry is www.darian,darien,advisors.io

yeah best way is just to holler we've got a form so just sit sit book some time with us on our calendar myself or our sales ops guy will be happy to meet with you you can also reach out to me on twitter my dms i also forgot telegram which is cameron underscore c p a i welcome any and all questions when it comes to tax so please please please inundate me it's something that's very important and as i say there's nothing life uncertain but death and taxes so hoping to you know make lives a little bit less stressed for you

nope same methodology applies so if you're receiving incentives if you launch the token anything you retain or whatnot would be potentially income or capital gains tax but if you're you know launching your own protocol devco and then launch the token or using a third party platform to do so same methodologies apply

exactly tax of tax evasion illegal tax minimization tax avoidance very much legal so let's stay on the legal side of things

alright cheers thanks all cheers cheers

later bye