BitShares Forum
Main => General Discussion => Topic started by: Darkbane on February 24, 2014, 04:39:45 pm
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Shouldn't we demand invictus become a legally registered non-profit organization before we start creating a pyramid of forks for them to get cash flow from again and again? I mean if we're about protecting the community, shouldn't we start with them to protect us?
I say this because currently... they are a for-profit company... which means all these "donations" get taxed... do you think its right for them to pay 40-50% of taxes on our donations... when if they were a non-profit they would not be taxed at that rate and more of our money would be used for us?
that one step alone could save millions over the course of a year with the amount of money they are getting...
The federal government imposes a tax on gifts larger than a certain amount. This tax is paid by the person giving the gift, not the recipient. The gift tax rules apply to gifts given by corporations. However, when gift tax is due on corporate gifts, it's not actually the corporation that's liable for paying the tax.
Individuals Only
According to the Internal Revenue Service, the gift tax applies only to "individuals" -- that is, people. Corporations do not pay gift tax, nor do other entities such as partnerships, estates or trusts. However, if a corporation does give a gift that qualifies for the tax, the tax still has to be paid by someone.
Paying the Tax
When a corporation gives a taxable gift, the stockholders of that corporation are liable for reporting and paying gift tax; each must file a gift tax return for his "share" of the gift. Tax law is essentially silent about how to divide up the responsibility, since corporations generally don't go around giving taxable gifts. Small-business corporations with just a handful of shareholders may be able to assess the responsibility fairly easily.
Related Reading: How Does a US Corporation Utilize Foreign Tax Credits?
Gifts Subject to Tax
Gift tax is assessed based on the total value of the gifts from a particular giver to a particular recipient. As of 2012, a giver could provide up to $13,000 worth of gifts to a recipient before the tax would apply. With such a limit, a business shouldn't have to worry about gift taxes for token gifts. Gifts to tax-exempt organizations, including charities, are not taxable
Bytemaster, once again I commend you guys on trying to find creative interpretations of the law, however you are not "accepting gifts"... you are taking "donations" in one statement, "earning" in another statement, "competing" in another statement, and then referring to the item in question as "shares" or an "investment"... that's the legal problem!
you can't just decide what type of taxes or product you want something to be and only follow that imaginary line, you have to follow what you're actually doing... either you're selling a product to customers, you're taking donations (which are not gifts), or you are having an IPO and selling off shares of invictus or a sub-company owned by invictus... creative interpretation does not allow you to bend rules, especially when during this "donation" phase you needed to comply with the laws of 50 american states and whatever international laws apply for each individual country where you accepted them from..
thats the issue...
everyone company in this country would consider every transaction a "donation" if they could skirt the IRS and call it a gift from their "patron"... so the problem remains as to how this will be classified in the eyes of the IRS... as of now its all a for-profit business model which will have substantial taxes due unless like you said, you spend every penny... this does not mean you WON'T have to pay taxes, it will be greatly reduced, but there will be significant taxes for payroll, healthcare, along with all the other normal state local federal taxes every business must pay... then it will come down to if employees are considered independent contractors or not, and there are very strict guidelines to determine if someone is or is not, and companies can pay a substantial fine for trying to skirt that law as well...
you see my issue is the fact you guys are "looking into non-profit" status means you are NOT getting the amount of legal advice and thought before all this is done, you're only doing it after you realize there very well are going to be issues, and that is what scares me with my "donations"... because THOSE donations could become property seized and distributed as a reward so they will not go for the true intention of developing this community as promised...
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Additionally corporations only pay taxes on profits, not revenue.
As long as our 2013 expenses match our income no tax is due.
These issues are being handled by our accountants and lawyers and yes we have looked into non-profit status.
this leads me to another series of questions... is the companies intention to spend every penny they receive in calendar year 2014, leaving no money leftover for future development in 2015? if that is the goal to escape taxation, what happens to the company and the software in 2015 when there is no longer any backing of all this behind it, which as stated gives value to everyone involved...
I assume there will be money leftover or more attempts to raise some, otherwise is this a 2014 and out project? what if its not completed by 2014 year end?
P.S. there will be taxes due even if expenses match profits... thats not how all the business taxes work... especially the dozens of new healthcare taxes from the affordable care act... especially if this company is not actually incorporated and is simply "doing business as" under the CEO's social security number when he files taxes...
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Would a developer please comment on the difficulty of forking and assigning equity to PTS/AGS? How is it done?
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It is easy for one with technical understanding of the code to produce a fork and assign equity. I wrote the document and it is also already merged with the website.
For those with no technical understanding, you can hire out someone to make the basic chain and include the equities, then you do the finer stuff like logos and icons. Or you could try going it alone, whichever works for you.
Thanks. How much would it cost to hire a technician to make the basic chain and include the equities?
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A simple job is easy, max of 200 PTS. For a customized version you can expect charges of up to 600 PTS. For something truly unique such as an entirely PoS implementation 1500 PTS. Best way to figure and negotiate prices is to find someone who will do it for you, detail what you want and expect then agree with them on time and price. Try to avoid copy paste devs, lol you'll lose quality and maybe even the product will be defective.
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Additionally corporations only pay taxes on profits, not revenue.
As long as our 2013 expenses match our income no tax is due.
These issues are being handled by our accountants and lawyers and yes we have looked into non-profit status.
this leads me to another series of questions... is the companies intention to spend every penny they receive in calendar year 2014, leaving no money leftover for future development in 2015? if that is the goal to escape taxation, what happens to the company and the software in 2015 when there is no longer any backing of all this behind it, which as stated gives value to everyone involved...
I assume there will be money leftover or more attempts to raise some, otherwise is this a 2014 and out project? what if its not completed by 2014 year end?
P.S. there will be taxes due even if expenses match profits... thats not how all the business taxes work... especially the dozens of new healthcare taxes from the affordable care act... especially if this company is not actually incorporated and is simply "doing business as" under the CEO's social security number when he files taxes...
this is why a lot of US bitcoin businesses are operating offshore using other jurisdictions.
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this leads me to another series of questions... is the companies intention to spend every penny they receive in calendar year 2014, leaving no money leftover for future development in 2015? if that is the goal to escape taxation, what happens to the company and the software in 2015 when there is no longer any backing of all this behind it, which as stated gives value to everyone involved...
I assume there will be money leftover or more attempts to raise some, otherwise is this a 2014 and out project? what if its not completed by 2014 year end?
P.S. there will be taxes due even if expenses match profits... thats not how all the business taxes work... especially the dozens of new healthcare taxes from the affordable care act... especially if this company is not actually incorporated and is simply "doing business as" under the CEO's social security number when he files taxes...
this is why a lot of US bitcoin businesses are operating offshore using other jurisdictions.
and this is why I want them to take a step back, realize they need to put as much effort into the legal end of this as the software end... in order to protect the investment the community is making in this project... New York is already writing legislation regulating these coins, exchanges, and software now... beating them to market does not protect it, thats why the legal orders must be in place ahead of time...
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this leads me to another series of questions... is the companies intention to spend every penny they receive in calendar year 2014, leaving no money leftover for future development in 2015? if that is the goal to escape taxation, what happens to the company and the software in 2015 when there is no longer any backing of all this behind it, which as stated gives value to everyone involved...
Non-profit organizations are required to spend what they receive. 501(c) status in the USA is not a license to accumulate untaxed donations.
As for "the goal to escape taxation," spending $1 foolishly in order to avoid 40¢ in taxes is foolish.
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New York is already writing legislation regulating these coins, exchanges, and software now... beating them to market does not protect it, thats why the legal orders must be in place ahead of time...
Until the statutes and regulations are enacted, it is impossible to know what they will require and what "legal orders must be in place."
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this leads me to another series of questions... is the companies intention to spend every penny they receive in calendar year 2014, leaving no money leftover for future development in 2015? if that is the goal to escape taxation, what happens to the company and the software in 2015 when there is no longer any backing of all this behind it, which as stated gives value to everyone involved...
Non-profit organizations are required to spend what they receive. 501(c) status in the USA is not a license to accumulate untaxed donations.
As for "the goal to escape taxation," spending $1 foolishly in order to avoid 40¢ in taxes is foolish.
I absolutely agree with you on both statements... however the non-profit status gives them a period of time to spend that money on the community... so money raised this year can be spread out over multiple years to sustain the ongoing project... however NOTHING prevents them from spending all the money to avoid taxes, nothing also prevents them from spending it any way they see fit which might not benefit the community either... with non-profit status they would come under legal scrutiny for most of the money to go towards the community... while I understand its a trust game, isn't their social consensus for the community better realized and backed if they were a non-profit held to a different standard? it would further expand their abilities and mission statement, while giving protection to us as well...
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New York is already writing legislation regulating these coins, exchanges, and software now... beating them to market does not protect it, thats why the legal orders must be in place ahead of time...
Until the statutes and regulations are enacted, it is impossible to know what they will require and what "legal orders must be in place."
In the sense that you can't predict new legislation sure... however they are walking on the edge of many legal matters present into todays law system with how they have conducted this whole operation... worrying about future laws is a second priority at this point since they are stepping all over some today which could impact things if not handled correctly...
"donations", "earning", "competing"... they all have different legal meaning and standing and are constantly used interchangeable on a single paragraph of the AGS page... each of the 50 states have different laws pertaining to each type of transaction under these references... but you can't pick and choose which one you want it to be on a whim... you need to clearly define it to get you the structure to work around so legally you and the other person are protected...
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[W]hile I understand its a trust game, isn't their social consensus for the community better realized and backed if they were a non-profit held to a different standard? it would further expand their abilities and mission statement, while giving protection to us as well...
I will have to let bytemaster comment on the Social Consensus and its relationship to a government-registered corporation, whether for-profit or non-profit.
However, what protect to the BitShares community need or can be given, considering that the software is to be released into the wild?
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[W]hile I understand its a trust game, isn't their social consensus for the community better realized and backed if they were a non-profit held to a different standard? it would further expand their abilities and mission statement, while giving protection to us as well...
I will have to let bytemaster comment on the Social Consensus and its relationship to a government-registered corporation, whether for-profit or non-profit.
However, what protect to the BitShares community need or can be given, considering that the software is to be released into the wild?
Well the company is stating that this software has more meaning because its backed by the company, which is funded directly by us, so in theory while they are still operating it has more meaning even when released because they are able to develop and further it along... even when released, it will still come with legally binding usage restrictions... think of the gnu public license... you may use this software under these terms and conditions... its free to use, but it must be used within this scope allowed... hence their idea to get PTS/AGS holders shares of any coin or business using it, legally CAN be enforced by them in a court of law since they released the software with the license agreement... they don't have to charge to have legal ownership or rights to prosecute miss-use of it... otherwise microsoft would sit back and let folks write all their software for them, compile it with their own name and call it window 9... that would be illegal use of the freely distributed software, unless the author said a for-profit commercial company may repackage and sell it freely...
my goal is to make sure this company sticks around for more than a short time period.. because I do believe it adds value if they can sustain themselves and the software in the future... which in turn benefits all of us... however they are putting that in jeopardy which in turn puts the community in jeopardy and in turn risks our investment that was exchanged to them and that they freely took under the terms issued once, changed once, issued again, and now slightly modified since...
remember... there was no AGS not to long ago... thats why we all went for PTS... now that has since changed...
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[W]hile I understand its a trust game, isn't their social consensus for the community better realized and backed if they were a non-profit held to a different standard? it would further expand their abilities and mission statement, while giving protection to us as well...
I will have to let bytemaster comment on the Social Consensus and its relationship to a government-registered corporation, whether for-profit or non-profit.
However, what protect to the BitShares community need or can be given, considering that the software is to be released into the wild?
Well the company is stating that this software has more meaning because its backed by the company, which is funded directly by us, so in theory while they are still operating it has more meaning even when released because they are able to develop and further it along... even when released, it will still come with legally binding usage restrictions... think of the gnu public license... you may use this software under these terms and conditions... its free to use, but it must be used within this scope allowed... hence their idea to get PTS/AGS holders shares of any coin or business using it, legally CAN be enforced by them in a court of law since they released the software with the license agreement... they don't have to charge to have legal ownership or rights to prosecute miss-use of it... otherwise microsoft would sit back and let folks write all their software for them, compile it with their own name and call it window 9... that would be illegal use of the freely distributed software, unless the author said a for-profit commercial company may repackage and sell it freely...
my goal is to make sure this company sticks around for more than a short time period.. because I do believe it adds value if they can sustain themselves and the software in the future... which in turn benefits all of us... however they are putting that in jeopardy which in turn puts the community in jeopardy and in turn risks our investment that was exchanged to them and that they freely took under the terms issued once, changed once, issued again, and now slightly modified since...
remember... there was no AGS not to long ago... thats why we all went for PTS... now that has since changed...
It would appear that Darkbane has hijacked another thread to spread his FUD.
Apparently a conflicted soul with motivations that are at best mixed, here is a quote from Darkbane in another thread (where I wish he would confine his FUD, or perhaps the admin could open up a "LEGAL" thread for his viewpoint):
"P.S. I've got a thousand more question... but if the lawyers say pay me 1000 PTS to go away and sign a contract never to talk again, I would consider that a great investment heh... I'll fly to you to sign the papers..."
https://bitsharestalk.org/index.php?topic=2951.15
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darkbane, please respect the forum by inquiring in the right places.
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Wish this forum had an ignore button
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I for one am all for hearing what Darkbane has to say. Let's keep it in one thread though.
Until someone from i3 gets back to us with more specific info this conversation can't really make progress, unless darkbane has specific advice of some kind besides "get a lawyer"
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I for one am all for hearing what Darkbane has to say. Let's keep it in one thread though.
Until someone from i3 gets back to us with more specific info this conversation can't really make progress, unless darkbane has specific advice of some kind besides "get a lawyer"
Darkbane has "a thousand questions". He wants the whole focus to be on his concerns. Who wants the Invictus team to devote their limited time to placating his "thousand" concerns?
I agree that he has made some valid points from his perspective but I don't agree that he should hijack others' threads to force the addressing of his points.
I do not share his perspective, and I am one who lost a great deal when Mt.Gox's US bank accounts were seized. My perspective is that what Invictus is attempting to achieve in terms of decentralization would negate his concerns if successful.
Why has he not opened up his own thread for discussion of his concerns? Why hijack others' threads? I alluded to his conflicted motivations above.
So, yes, let's keep it in one thread, hopefully opened by Darkbane himself with as concise as possible a presentation of his thesis and an appropriate title.
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I for one am all for hearing what Darkbane has to say. Let's keep it in one thread though.
Until someone from i3 gets back to us with more specific info this conversation can't really make progress, unless darkbane has specific advice of some kind besides "get a lawyer"
The challenge we have is that anything we say can and will be used against us ;) Even speculating on what the laws may be or how to phrase things.
I encourage Darkbane to contact us directly to resolve any issue without confusing the issue due to his incomplete knowledge of our situation.
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http://rt.com/news/five-eyes-online-manipulation-deception-564/
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I for one am all for hearing what Darkbane has to say. Let's keep it in one thread though.
Until someone from i3 gets back to us with more specific info this conversation can't really make progress, unless darkbane has specific advice of some kind besides "get a lawyer"
The challenge we have is that anything we say can and will be used against us ;) Even speculating on what the laws may be or how to phrase things.
I encourage Darkbane to contact us directly to resolve any issue without confusing the issue due to his incomplete knowledge of our situation.
well this is interesting... I just noticed I guess I started this thread... even though I did not... if you want to force me to reply to only one forum, then why not send me a personal message... I only stumbled across this one as I was randomly clicking through the dozens of forums and threads and discovered a legal topic recently created...
I can't contact you directly because the invictus website online lists a generic email address and single phone number... if you have an office extension or direct email address and want to go back and forth with me on concerns... or how about this next conference coming up, will you be available at it? well I think I read about another conference, I'm not sure there are so many places for information posted they often cross eachother and that one might already be over with...
P.S. onceuponatime... I do take offense to you saying I hijack threads... I am directly responding to people posting information and quote what they had said, and my reply directly does have bearing on the subject they mentioned in some form... so its not a hijack to sell a video card, its directly responding to their information with my information related to it in some way...
having questions and wanting answers is never wrong... seeking knowledge is never wrong... trying to impact the community in a way that I feel protects and strengthens the community is never wrong... otherwise they would not have addressed my primary concern about "donations, patrons, etc etc" and simplified it to one legal term that now gives them a bearing going forward with less legal liabilities... THAT IS GOOD FOR OUR COMMUNITY....