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Started By
Message
1
Posted on 11/12/21 at 11:37 am to rocket31
quote:
but to be fair, that law is dumb af
Eh, I guess. The intentions are pretty straightforward, but crypto makes it tough.
GME still exists. GMEX does too.
Posted on 11/12/21 at 11:39 am to slackster
With GME worth nothing now I’m sure a proper tax guy can work it out. Anybody who isn’t paying taxes on crypto now is an idiot.
Posted on 11/12/21 at 11:44 am to mtcheral
quote:
With GME worth nothing now I’m sure a proper tax guy can work it out. Anybody who isn’t paying taxes on crypto now is an idiot.
Well the GME “loss” can only offset ordinary income to a very small extent, and the GMEX fair market value on delivery is treated as ordinary income, not a capital gain, so the losses on GME don’t really help.
This post was edited on 11/12/21 at 11:45 am
Posted on 11/12/21 at 11:49 am to Rize
Posted on 11/12/21 at 12:22 pm to slackster
a) receive airdrop after a fair-market value has been established (initial airdrop is $0.001)
b) asset price drops before you can sell
c) you may now owe more than the asset is worth
lol
b) asset price drops before you can sell
c) you may now owe more than the asset is worth
lol
Posted on 11/12/21 at 12:25 pm to OneMoreTime
quote:
GME (Gamecoin) by OneMoreTime
Basically, because of the way the new gmex was airdropped and not just hard forked, the airdrop counts as income. So if you got air dropped 1 million gmex, you are supposed to pay taxes based on the value of gmex at the time of the airdrop.
I'd imagine if they airdropped everyone their GMEX with $0 worth of liquidity, only to add the liquidity after the fact, it's fine. Sell your GME at a basically 99% loss to offset the gains of GMEX from $0 to whatever price you'd sell at. Export all transactions from your BSC wallet to show total gains and losses across all coins.
Posted on 11/12/21 at 1:00 pm to EveryonesACoach
Meh, I’m at 4.2 million coins after taking out my initial investment when it was at .04 cents a coin. I figure since I am now on house money, let’s see where it goes.
Posted on 11/12/21 at 1:02 pm to EveryonesACoach
quote:
Sell your GME at a basically 99% loss to offset the gains of GMEX from $0 to whatever price you'd sell at.
Right now, anyone that hasn’t sold any GME or any GMEX has unrealized short term losses in GME, unrealized short term losses in GMEX, and ordinary income taxes owed on the fair market value of the GMEX they received upon the airdrop.
Let’s say for the sake of argument you had $1,000,000 worth of GMEX at the airdrop - you’d owe ordinary income taxes on the $1,000,000 even though it’s only worth $500,000 now, and selling it at the loss would only offset capital gains/losses. Only $3,000 of your loss could be counted against ordinary income.
Hell, if you had that much GMEX at airdrop, you could conceivably owe more in taxes than GMEX is even worth if it falls below $.01.
Things like this actually happened to people with stock options in the dot com bubble. They owed more taxes than they even profited.
This post was edited on 11/12/21 at 1:03 pm
Posted on 11/12/21 at 1:08 pm to slackster
correct, and the fact GMEX is clipping 7% off the top for every transaction makes this even more mind-numbing 
Posted on 11/12/21 at 1:09 pm to EveryonesACoach
quote:they added liquidity at 6:45pm UTC on nov 3. Airdrop happened at 9:59pm UTC on nov 3. So it’s a taxable gain on whatever the value was at the time of the airdrop. Should be around 3.5 cents/gmex I think
I'd imagine if they airdropped everyone their GMEX with $0 worth of liquidity, only to add the liquidity after the fact, it's fine. Sell your GME at a basically 99% loss to offset the gains of GMEX from $0 to whatever price you'd sell at. Export all transactions from your BSC wallet to show total gains and losses across all coins.
This post was edited on 11/12/21 at 1:10 pm
Posted on 11/12/21 at 1:11 pm to slackster
quote:
Let’s say for the sake of argument you had $1,000,000 worth of GMEX at the airdrop - you’d owe ordinary income taxes on the $1,000,000 even though it’s only worth $500,000 now, and selling it at the loss would only offset capital gains/losses. Only $3,000 of your loss could be counted against ordinary income.
I refuse to believe this is how it would play out in reality. This makes zero sense.
Posted on 11/12/21 at 1:13 pm to PhiTiger1764
Much of the tax code makes zero sense to be fair.
Posted on 11/12/21 at 1:15 pm to slackster
It could even be problematic for people with smaller amounts. If you had $100k of GMEX and you and your wife make $100k of other taxable income, that GMEX airdrop is going to cost you about $30k in fed/state taxes in LA.
Even if you only paid $1k for GME, $30k in GMEX is now your break even.
Even if you only paid $1k for GME, $30k in GMEX is now your break even.
Posted on 11/12/21 at 1:22 pm to slackster
Let’s say everyone was an honest tax paying citizen. Upon receiving their airdrop, every one of the 8000+ holders immediately decides to sell half of their holdings in order to pay for their future ordinary income taxes.
It would be impossible, quite literally impossible, to sell their airdrop immediately for “what it is worth.” So at that point I don’t understand how it would work in the real world. There is no way people are truly paying taxes this way.
It would be impossible, quite literally impossible, to sell their airdrop immediately for “what it is worth.” So at that point I don’t understand how it would work in the real world. There is no way people are truly paying taxes this way.
Posted on 11/12/21 at 1:32 pm to PhiTiger1764
quote:
I refuse to believe this is how it would play out in reality. This makes zero sense.
We’ve seen this with stock options granted to shareholders - outside of actual gifts between people, when you’re given something without giving something in return, the fair market value of what you’re given at the time it’s given is taxable as ordinary income.
You ended up with GMEX and still had GME. The FMV of GMEX was based on the price when the snapshot happened, something like $.031 or so. That FMV established your cost basis for future capital gain/loss calculations, but it’s ordinary income the moment it happens.
Posted on 11/12/21 at 1:37 pm to PhiTiger1764
quote:
Let’s say everyone was an honest tax paying citizen. Upon receiving their airdrop, every one of the 8000+ holders immediately decides to sell half of their holdings in order to pay for their future ordinary income taxes.
It would be impossible, quite literally impossible, to sell their airdrop immediately for “what it is worth.” So at that point I don’t understand how it would work in the real world. There is no way people are truly paying taxes this way.
Well yeah, what people do and what they’re supposed to do are different, but it doesn’t change the law.
People should take this up with Gamecoin - they’re the ones that created the new coin and created the potential mess.
I’d be pretty shocked if anyone actually consider the implications though. I didn’t think about it until it was posted in here a bit ago, but it’s absolutely true.
Posted on 11/12/21 at 3:09 pm to slackster
This makes sense based on that IRS document. But in practice, there is no entity reporting these transactions, Trustwallet doesn't even have identifying information.
I buy BNB through crypto.com. If I sent $1000 worth out to Trustwallet, messed around in a bunch of smart chain coins, and eventually transferred $100k worth of BNB back, sold and claimed that as short term gains, it will line up with what Crypto.com reports to the IRS, right? It might not technically be how it should happen, but I don't think the IRS will come knocking if people went that route.
I buy BNB through crypto.com. If I sent $1000 worth out to Trustwallet, messed around in a bunch of smart chain coins, and eventually transferred $100k worth of BNB back, sold and claimed that as short term gains, it will line up with what Crypto.com reports to the IRS, right? It might not technically be how it should happen, but I don't think the IRS will come knocking if people went that route.
Posted on 11/12/21 at 3:13 pm to EveryonesACoach
quote:
EveryonesAMoneyLaunderer
FIFY
Posted on 11/12/21 at 3:46 pm to PhiTiger1764
quote:
So at that point I don’t understand how it would work in the real world
The Federal government doesn't live in the real world, but that doesn't stop them from imposing their rules from their made-up world on our real world. 
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