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Offline luckybit


As a category of what to describe this income we have active and passive income.

Dividends, yield and delegate fees definitely would fit into the category of passive income.

http://www.investopedia.com/terms/p/passiveincome.asp

But this kind of passive income is algorithmic. Can we think of a phrase we could call this new kind of income?

My suggestions:
1) Automatic passive income (API)
2) Algorithmic passive income (API)

Do either of these phrases make sense? Can we think of better explanations for how to answer the question if we are asked "What do you do for a living?" and "Where is the source of your income?".

I think delegates will have a difficult time explaining it because there isn't an agreed upon set of words to explain it. I think Bitshares X does provide some kind of income which means there is likely to be an income tax, barter tax, at least somewhere, but since the industry is so new no one really even knows what it is.
« Last Edit: October 29, 2014, 09:32:22 PM by luckybit »
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zerosum

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For tax purposes (in USA), I am not certain this is income at all.

Online lil_jay890

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I think its a good idea lucky...

Dividends and yield reflect back to old/legacy instruments

Something new and fresh is needed to reflect how new and fresh bitshares is

Offline luckybit


For tax purposes (in USA), I am not certain this is income at all.

Even if it is barter it still is taxable the moment you spend it. I just don't know how we would even explain it.

My guess is if you spend BitUSD you'll either be paying barter or income taxes of some sort somehow. I doubt it would be completely tax free. But even if it were tax free how exactly would we explain our income sources to people who don't know this industry so we don't appear as criminals?

As a delegate how would you explain to people how you make money?
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zerosum

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For tax purposes (in USA), I am not certain this is income at all.

Even if it is barter it still is taxable the moment you spend it. I just don't know how we would even explain it.

My guess is if you spend BitUSD you'll either be paying barter or income taxes of some sort somehow. I doubt it would be completely tax free. But even if it were tax free how exactly would we explain our income sources to people who don't know this industry so we don't appear as criminals?

As a delegate how would you explain to people how you make money?

When you spend it is  capital gain/loss. Weird enough... :)





disclaimer: I am NOT a tax expert! Just playing one here...  with correctness rating rarely beating the coin toss.
« Last Edit: October 29, 2014, 09:38:38 PM by tonyk2 »

Offline Empirical1.1

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Given how high BitAsset yield is, maybe,

'passive-aggressive income'     :)


Offline luckybit


For tax purposes (in USA), I am not certain this is income at all.

Even if it is barter it still is taxable the moment you spend it. I just don't know how we would even explain it.

My guess is if you spend BitUSD you'll either be paying barter or income taxes of some sort somehow. I doubt it would be completely tax free. But even if it were tax free how exactly would we explain our income sources to people who don't know this industry so we don't appear as criminals?

As a delegate how would you explain to people how you make money?
When you spend it is  capital gain/loss. Weird enough... :)

But if it's not an investment then it cannot be a "capital gain". Or can it?

Quote
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price.[1] Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price.


Dividends, yield, and delegate fees are not capital gains. That would be income. Capital gains would apply to people who purchased Bitcoin as an investment of some sort and then the price of Bitcoin went up. In our case it doesn't work like that at all because trading in Bitshares can change the amount of BTSX you have so that capital gains don't really track anything.

Income is the only thing you can track. You know if you have more BTSX or less. You know if you have more BitUSD or less. You can track income in BitUSD received from the algorithmic function. You can track automatic income from algorithmic sources.

1% yield per year would just become 1% income per year right? The question also is about how do you tell people what you do for a living? No one is going to believe you if you tell people you work for a computer algorithm without having a word to explain what that even is.

So that is why I came up with a couple phrases. Automatic passive income and algorithmic passive income. This way people don't have to understand Bitshares to understand it is at least conceptually possible to get passive income from an algorithm or automatic process.
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Offline Troglodactyl

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My understanding is that as long as it's in the BitShares system you haven't realized a gain, so it wouldn't be income.  So you barter into BitShares, and then when you barter back out of it you may realize a capital gain or loss.  Everything that happens entirely inside BitShares seems like it would be basically irrelevant.  BitAssets are just magic jugs of BitShares, remember...

Offline biophil

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My understanding is that as long as it's in the BitShares system you haven't realized a gain, so it wouldn't be income.  So you barter into BitShares, and then when you barter back out of it you may realize a capital gain or loss.  Everything that happens entirely inside BitShares seems like it would be basically irrelevant.  BitAssets are just magic jugs of BitShares, remember...

You really think that's how the IRS will see it? I'd be pretty shocked if the IRS didn't see magic jugs of BitShares and say "hey! those jugs look taxable to me!"

Offline luckybit

My understanding is that as long as it's in the BitShares system you haven't realized a gain, so it wouldn't be income.  So you barter into BitShares, and then when you barter back out of it you may realize a capital gain or loss.  Everything that happens entirely inside BitShares seems like it would be basically irrelevant.  BitAssets are just magic jugs of BitShares, remember...

Interesting. But if one of your friends were to ask you what you do for a living and where is your money coming from how could you convince them that you're not in organized crime?

If there is no word to define what you do, and you cannot explain it to anyone without sounding like a sci-fi crazy,  then does it help? There has to be some words to explain it to people who aren't knowledgeable.
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