- This topic has 7 replies, 1 voice, and was last updated 3 months, 1 week ago by Simple_Yam.
- Saturday, August 20th, 2022 at 21:19 #358579whisper_of_smokeParticipant
Hi, I have some ETH on a hardware wallet that was UNFORTUNATELY purchased on Coinbase with its KYC. The IRS already has ruled that forks and airdrops are classified as income meaning I would be charged tax for the value of the fork on the day I received it. This is a confusing cluster for me. I haven’t been through this before. I might have to sell the fork on the first day just to be rid of it and put aside a portion for taxes but I don’t even know if coinbase would let me send ETH back to them to somehow sell the fork which they probably won’t support. Any good advice is appreciated. Thank you.Saturday, August 20th, 2022 at 21:19 #358580Maswasnos
There was a guy who claimed to be a CPA here a few days ago saying that the value of a coin like PoW-ETH at time of fork is 0 due to there not being a trading history, and that’s also when you “receive” it.
So if that’s true, you don’t owe any taxes by default and you’d only owe taxes if you sold the PoW-ETH.
Frankly, chances are that the fork won’t be around very long and will be deeply unpopular. It’s probably not worth worrying about.Saturday, August 20th, 2022 at 21:19 #358581WilliamShattnerpants
We don’t know whether Coinbase will decide to list any forked ETH. It’s a pretty big deal for them to list a coin in the first place.
If they do list it, then there is the question of whether they’ll decide to give you your forked ETH. It’s entirely up to Coinbase whether to keep it or give it away. They have no incentive to give it away if it ends up having any value.
An example of this is NEO, which you could earn gas from, but if you held your NEO on bittrex (not Coinbase but same concept applies), you wouldn’t see your gas because bittrex didn’t want to list it, so they just kept your gas. You had to move your NEO off bittrex to a NEO wallet if you wanted to start seeing your earned gas.
Why is this the case? Because you don’t really own coins if they are on Coinbase. You own an “IOU” that says they owe you those coins. The coins may not even exist. So if the coin is generating something like gas, or if it forks, you don’t benefit from that unless Coinbase (or whatever exchange you use) decides you should get that benefit.
If your ETH is on Coinbase, assume you will not see any forked ETH at all. If you ever do, and it would be way down the road (because listing it and giving it to you takes some technology changes and business decisions, which don’t happen over night) then consider it a bonus.
If the miracle happens, you sell it, pay the IRS their portion, and buy something nice for yourself with the rest.
But the chances of it happening? Too many things standing in the way, especially Coinbase.Saturday, August 20th, 2022 at 21:19 #358582BlueEyedBoggleFish
If you can’t pay tax in ethereum, then surely the IRS should not see it as realized income.
Not saying that’s how it is, but definitely how it should beSaturday, August 20th, 2022 at 21:19 #358583sztamajzaqj
Fortunately or unfortunately, tax is a thing we would have to deal with, it’s much easier on CEX but Defi would be a struggle.
Guess as Regulations sets in properly, DeFi would be forced for find how to sort that.
Guess why Alliance block is having regulatory compliance infrastructure in place.Saturday, August 20th, 2022 at 21:19 #358584KaiSosceles
Where can you buy a hardware wallet from Coinbase? O.oSaturday, August 20th, 2022 at 21:19 #358585Orang314
Is converting ETH to ETH 2.0 a taxable event?
Because Ethereum 2.0 will be completely replacing Ethereum over time, it’s reasonable to assume that you will not incur a taxable event when converting ETH to ETH 2.0.Saturday, August 20th, 2022 at 21:19 #358586Simple_Yam
Do you have to pay taxes if you claim you have no idea what forks are and never touch it? 🤭
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