I’m Daniel Winters, and I’m a tax accountant.
The author’s analysis @adrewski is COMPLETELY INCORRECT, and will likely result in additional tax due, NOT savings.
Under Internal Revenue Code Section 362(a)(2), the property contributed to the corporation has the SAME COST BASIS as for the individual who contributed the property! So, now the gain would be taxed at the 35% corporate tax rate. Individual tax rates for long term cap gains are 15% or 20%. So, this could easily result in paying 35% tax, instead of 15% or 20%.
Please DO NOT carry out a transaction as recommended by the author of this post under any circumstances. Honestly, is it realistic that you could just contribute appreciated property to a corporation, then the gain magically disappears? That is NOT how it works. Daniel Winters, M.S. Taxation. Link and quotes from Internal Revenue Code below.
https://www.law.cornell.edu/uscode/text/26/362
(a)PROPERTY ACQUIRED BY ISSUANCE OF STOCK OR AS PAID-IN SURPLUS
If property was acquired by a corporation—
(1)
in connection with a transaction to which section 351 (relating to transfer of property to corporation controlled by transferor) applies, or
(2)
as paid-in surplus or as a contribution to capital,
then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain recognized to the transferor on such transfer.
(b)TRANSFERS TO CORPORATIONS
If property was acquired by a corporation in connection with a reorganization to which this part applies, then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain recognized to the transferor on such transfer.
I'm a CPA and an attorney. @danielwinters is absolutely correct and OP is simply wrong. Don't follow OP's suggestion.
Can you and the other lawyer join forces and post a blog showing people how to go about doing taxes on Steem winnings or earnings?
And is there any way to pay someone to compile all the transactions and do it for a fee? Someone can make a fortune on Steem just offering that service to all Steem users.
meep
You are correct, I am deleting the original article
So much misinformation and disinformation being spread. What exactly is the correct way to pay your taxes on Steem or any other cryptocurrency but particularly Steem? Do I have to hire a CPA just to figure out how to properly pay taxes and would the CPA even know?
If you are in the US, that is incorrect.