Saturday, August 12, 2017
I am getting into investments using cryptocurrencies like Bitcoin, and I have been researching how to pay taxes on the gains from various investment opportunities in that industry. The IRS has come out with some guidelines related to virtual currencies, most notably "Notice 2014-21". I have a number of questions that I will be addressing directly to the IRS on the subject of income taxes and capital gains taxes, but I wanted to bring your attention to one aspect of the Notice that caught my attention, with the hope that you will be able to consider the implications and draft legislation to address my concern.
I would like to present two of the questions from Notice 2014-21, questions 6 and 8:
Question 6: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property?
Answer 6: Yes. If the fair market value of property received in exchange for virtual currency exceeds the taxpayer's adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency. See Publication 544, Sales and Other Dispositions of Assets, for information about the tax treatment of sales and exchanges, such as whether a loss is deductible.
Question 8: Does a taxpayer who "mines" virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?
Answer 8: Yes, when a taxpayer successfully "mines" virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.
The first question is dealing with capital gains, the difference in value between when the virtual currency is bought and when it is sold. The second question is dealing with taxes upon generation of the virtual currency.
This would mean that gains from mining, even cloud mining contracts that people may purchase around the world, need to be tracked for tax purposes so that the fair market value of the coins generated by the mining can be determined according to basic accounting rules, whether that be First In First Out or some other method. However, it also means that any transactions conducted in bitcoin for real world goods and services would be subject to capital gains taxes on the difference between when the coin was generated and when it was exchanged for real currency or goods and services worth fair market value. That sounds to me like double taxation.
I would be interested in discussing this at some point if you are interested and in town. I know that a lot of people are getting into these currencies, and ensuring that the rules are fair would make it easier for a lot of people to pay the taxes they owe so we can get on with growing the economy.
Also, I wish that the taxes we paid on bitcoin generation like mining could be paid IN bitcoin. That might actually be kind of cool. Might also help balance the federal budget. Just a thought.
Thursday, July 20, 2017
Thursday, March 02, 2017
“But please realize,” she concluded, “that this new Act by Congress does not actually repeal any of the aspects of the previous law. Because all of those provisions are extremely popular with the American People, and even this President is smart enough to realize that removing health care access from people is a bad idea today. So we'll see what happens but I am of course hopeful for our future.”
Sunday, February 12, 2017
Thursday, December 22, 2016
Wednesday, December 07, 2016
It is my intention to run for Chair of the Washington State Progressive Caucus at the January reorganization meeting. If you have seen my posts and plans for the state party, the community inclusion effort includes introducing an amendment to the State Party Bylaws that formally codifies the existence of the Constituency Caucuses, and identifies in language the reason they exist, which is building bridges to all of our communities around the state and organizing local caucus structures in the Congressional Districts, Counties and Legislative Districts over the next few years as part of an overall Community Inclusion strategy. It's long past time to do this, and I'd like to build on the efforts that the current Board has already started that I heard about at the September WSDCC meeting.
For anyone who does not know me, I was born in Seattle, raised in Kent, spent 6 years in the US Navy, owned a small business in Everett in the 1990's, work for Nordstrom now, and I've been involved in the Democratic Party since 2003. I've been on the Executive Board of the 46th LD since 2005 as an At Large member, KCDCC Rep and Chair. I was one of the primary organizers for Bernie Sanders in 2015-2016, including being a National Delegate to the 2016 National Democratic Convention. I am currently on the Washington State Democratic Central Committee from King County, elected this past Sunday.
I am one of the founders of this Progressive Caucus in Washington State, and was Chair in 2007-2008 until I stepped back to focus on being Chair of the 46th, 1st Vice Chair of King County and Chair of the Washington State Democratic Chairs Organization in 2011. I stepped back in 2012, but returned to help Bernie get 74% in our state and 46% nationally. I am currently involved in national organizing efforts to encourage and train progressive activists on how to be effective agents of change in their local and state party organizations so that we can promote our values and push our policy objectives into law.
My top issues are Single Payer Health Care, Climate Change Action and Economic Opportunity for All. I have been writing, blogging, organizing and planning for 12 years. I have a degree in Business Systems Analysis, and I want to put those skills to work building the strongest Democratic Party that this state and this country has ever known. I ask for your vote.
Wednesday, November 30, 2016
Whenever I use the word Progressive, I have some people agree with me, and others looking confused or frustrated. It's easy to understand why. Progressive is a very subjective word, with multiple meanings coming from individuals and situations. Wikipedia has this definition:
"Progressivism is a philosophy based on the Idea of Progress, which asserts that advancement in science, technology, economic development, and social organization are vital to improve the human condition."
I've been reading about and participating in progressive politics for a few decades now, both in and out of the Democratic Party. This is my framing and it consists of four parts.
Grassroots, People-Powered Democracy
If a decision is being made on any level of government that affects you, your voice should be heard on that issue. What we need in this country and around the world is a way for people to get directly involved in the way our government operates. Many opportunities exist now, but they are hidden behind a wall of secrecy and only the hard-core activists seem to be able to break through. We have to make the process of electoral, issue based and identity based politics transparent and open so everyone can get involved, however that works for the individual.
The Concept of WE
The Earth is a single environment. Everything that affects individuals affects groups, and the larger the subject, the larger the group that is affected. I'm tired of hearing people describe the world in terms of 'us versus them'. We're all on this planet together, and the more we understand that, the better we will be able to create a world that works for everyone. How can we get a better understanding of how everyone is linked together, and that something affecting one affects us all?
Understanding the Past
Where do our problems come from? How do they relate to each other? If we search for an understanding of our past mistakes, we gain a better understanding of how not to repeat them. Maybe we can even solve two problems with the same action. Critical Thinking requires that we have an understanding of the foundations we stand on before we start building.
Looking to the Future
It's not enough anymore to think and act for the moment. In the big picture, we are creating the world of the future by our actions today. I'm concerned about how my children are growing up, but I'm just as concerned about the kind of world their grandchildren will be living in. We should grant them the power to turn that world into whatever they wish it to be, with clean air and water, energy resources to explore their dreams, a peaceful world where people talk instead of fight with each other. What can we do now, either big decisions or small actions, that can help to create that world of opportunity?
What is your definition? What is your framing?