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Offline fuzzy

Tax Guidance for Invictus Payment.
« on: January 26, 2015, 11:51:29 PM »

I have received a W2 from Invictus showing a receipt of approximately $2138 (I don't have it in front of me atm) for my work with the BitShares Community last year. 

However, I have paid nearly all of that to others who have helped (I think I kept approximately 10PTS=50(ish) dollars at the time). 

I also have received 100,000BTS from Invictus but will be putting the majority of that into getting the Legal Delegate set up so we can protect our community members in those places with the most dangerously strict cryptocurrency laws.  So my question is...how do I put this into my taxes?  If I have to pay taxes on the 100,000BTS regardless, I might have to just make sure to take the initial fees to make up for what I put up...not sure exactly what to do here. 

Will I have to pay taxes on what I already paid others (since I did not send THEM a W2) or will I have to show payment in some other way?  Or will this be tax exempt for me because I have given it all away? How, exactly, does this work? 
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Offline donkeypong

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Re: Tax Guidance for Invictus Payment.
« Reply #1 on: January 27, 2015, 12:51:05 AM »
This is not a complete answer and it's not legal or accounting advice, but hopefully it helps. You're in the U.S. as I recall? First, in your tax bracket, do those earnings change anything significantly? Do you have other ways to offset them (a business with expenses, etc.)? If it's a minor hit, you might just pay the taxes on it or find some other expenses that are loosely connected. If you're planning to start the legal delegate this year, then you'll have some more expenses on the way, but not for the previous tax year. Second, I don't think they were your employees, but if you paid them as independent contractors, you can 1099 them. It may be okay not to do so if the amount is small (I seem to remember that threshold is $600 apiece, but you'd have to confirm that). If you gave it to them (as in 'gifted' it), then there shouldn't be any gift taxes since it's way under the exclusion amount. You'd need to document those gifts and I'm not sure what info you'd need to include on that, but it may require names and social security numbers. Sorry, I haven't dealt with gifts before, but I'm hoping we'll all become quite familiar with these questions soon.
« Last Edit: January 27, 2015, 12:57:52 AM by donkeypong »

Offline bytemaster

Re: Tax Guidance for Invictus Payment.
« Reply #2 on: January 27, 2015, 01:20:54 AM »
I have received a W2 from Invictus showing a receipt of approximately $2138 (I don't have it in front of me atm) for my work with the BitShares Community last year. 

However, I have paid nearly all of that to others who have helped (I think I kept approximately 10PTS=50(ish) dollars at the time). 

I also have received 100,000BTS from Invictus but will be putting the majority of that into getting the Legal Delegate set up so we can protect our community members in those places with the most dangerously strict cryptocurrency laws.  So my question is...how do I put this into my taxes?  If I have to pay taxes on the 100,000BTS regardless, I might have to just make sure to take the initial fees to make up for what I put up...not sure exactly what to do here. 

Will I have to pay taxes on what I already paid others (since I did not send THEM a W2) or will I have to show payment in some other way?  Or will this be tax exempt for me because I have given it all away? How, exactly, does this work?

Fuzzy.. I am fairly certain you did not get a W2 but a 1099.  Anyway, if you have questions regarding taxes please feel free to contact Stan.
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Offline fuzzy

Re: Tax Guidance for Invictus Payment.
« Reply #3 on: January 27, 2015, 01:51:58 AM »
I have received a W2 from Invictus showing a receipt of approximately $2138 (I don't have it in front of me atm) for my work with the BitShares Community last year. 

However, I have paid nearly all of that to others who have helped (I think I kept approximately 10PTS=50(ish) dollars at the time). 

I also have received 100,000BTS from Invictus but will be putting the majority of that into getting the Legal Delegate set up so we can protect our community members in those places with the most dangerously strict cryptocurrency laws.  So my question is...how do I put this into my taxes?  If I have to pay taxes on the 100,000BTS regardless, I might have to just make sure to take the initial fees to make up for what I put up...not sure exactly what to do here. 

Will I have to pay taxes on what I already paid others (since I did not send THEM a W2) or will I have to show payment in some other way?  Or will this be tax exempt for me because I have given it all away? How, exactly, does this work?

Fuzzy.. I am fairly certain you did not get a W2 but a 1099.  Anyway, if you have questions regarding taxes please feel free to contact Stan.

Maybe we can keep it open? I want as much opinion on how to move forward as possible. I would like to also keep it open so others in similar positions can know how to move forward.  If this is ok.

Also, I would be interested in someone else working with me and cube in the legal delegate so we can get the best jurisdiction for funds.  I would ultimately prefer a way wherein I am not in control of those funds...but it is left to the community to use as it sees necessary.

Thanks for responding so quickly.
« Last Edit: January 27, 2015, 01:54:15 AM by fuzzy »
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Offline wesphily

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Re: Tax Guidance for Invictus Payment.
« Reply #4 on: January 27, 2015, 02:48:29 AM »
I have received a W2 from Invictus showing a receipt of approximately $2138 (I don't have it in front of me atm) for my work with the BitShares Community last year. 

However, I have paid nearly all of that to others who have helped (I think I kept approximately 10PTS=50(ish) dollars at the time). 

I also have received 100,000BTS from Invictus but will be putting the majority of that into getting the Legal Delegate set up so we can protect our community members in those places with the most dangerously strict cryptocurrency laws.  So my question is...how do I put this into my taxes?  If I have to pay taxes on the 100,000BTS regardless, I might have to just make sure to take the initial fees to make up for what I put up...not sure exactly what to do here. 

Will I have to pay taxes on what I already paid others (since I did not send THEM a W2) or will I have to show payment in some other way?  Or will this be tax exempt for me because I have given it all away? How, exactly, does this work?

Fuzzy.. I am fairly certain you did not get a W2 but a 1099.  Anyway, if you have questions regarding taxes please feel free to contact Stan.

Maybe we can keep it open? I want as much opinion on how to move forward as possible. I would like to also keep it open so others in similar positions can know how to move forward.  If this is ok.

Also, I would be interested in someone else working with me and cube in the legal delegate so we can get the best jurisdiction for funds.  I would ultimately prefer a way wherein I am not in control of those funds...but it is left to the community to use as it sees necessary.

Thanks for responding so quickly.

It greatly depends on how invictus formed the company. I would advise that you follow bytemaster's advice and contact Stan. There are things that he'll know that we wont know which will prevent us from helping you.

zerosum

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Re: Tax Guidance for Invictus Payment.
« Reply #5 on: January 27, 2015, 07:28:49 AM »
First,
It is a totally appalling tactic to send 1099s to any and everybody, that you can get your hand on (i.e. on of their SS# and address)... For any amount you can relate even loosely  to such individual...no matter the circumstance or reason for sending/paying such funds....


-5%
    -5%
        -5%



For those of you affected and paid in PTS, I recomed reding into 'Worthless Securities" in pub.550
http://www.irs.gov/publications/p550/ch04.html#en_US_2013_publink100010315


zerosum

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Re: Tax Guidance for Invictus Payment.
« Reply #6 on: January 27, 2015, 08:06:44 AM »
Here is question for the free market believer / genius, otherwise known as BM:

Is it better for the free world to pay 15% tax on some amount A.

Or is it better to treat it as an expense of the "GREAT Enterprise" (saving said 15% tax),

and let somebody else pay 15.3% (social security tax) + 20 % (federal income tax) + god forbid 6 % (state income tax) on the same amount A. 


That all is leaving aside the fact that those people perceived said amounts recieved as no strings attached gifts to begin with.

???

Offline arhag

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Re: Tax Guidance for Invictus Payment.
« Reply #7 on: January 27, 2015, 08:18:42 AM »
Here is question for the free market believer / genius, otherwise known as BM:

Is it better for the free world to pay 15% tax on some amount A.

Or is it better to treat it as an expense of the "GREAT Enterprise" (saving said 15% tax),

and let somebody else pay 15.3% (social security tax) + 20 % (federal income tax) + god forbid 6 % (state income tax) on the same amount A. 

Yeah, this is what I was thinking about too when bytemaster was arguing for distributing the funds as gifts/bonuses to the devs for tax reasons. But wasn't it a 35% tax rate and not 15%? Also wouldn't the bonuses be taxed at 25% (not 20%) as supplemental income? I assume this would be preferable to the 28% tax bracket that the devs are likely to be in.

And you have to keep in mind that those profits would need to be used to pay the devs anyway next year (they need to make a living while the price of BTS is still so low that a single 100% pay delegate can't afford to pay a reasonable wage), so the 15.3% FICA taxes + their federal and state income taxes would come into play for next year anyway on top of the 35% corporate income taxes.
« Last Edit: January 27, 2015, 08:26:51 AM by arhag »

 

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