There is no better feeling than realizing an old airdrop, reward, or incentive is actually worth a substantial amount of money and you did nothing to earn it. Traders oftentimes aren't even aware that worthless airdrops landed in their wallets. However, occasionally there are very valuable airdrops, as was the case with Uniswap. You need to consider the tax implications.All varieties of rewards in the DeFi space are considered as "other income" if generated in a non-business manner, or as self-employment income if generated in a business manner. The income from rewards is realized when you receive the reward and is calculated in USD at the market rate. It can get really messy if you have traded the tokens, mixed them in with your investing account, or swapped them.Basically any time you receive crypto for any reason (at least in the US), the transaction is immediately taxable, whether you sell and realize a gain to fiat or not. There have been countless stories of people never "cashing out," seeing the price of an asset they did not realize they owed taxes on crash, and then having to sell at a loss to cover the taxes. Don't let this be you.As you know, I use Blockpit who are also amazing newsletter sponsors. They calculate the taxes for you and make sure that you are compliant. SIGN UP HERE and get a 10% discount.We are in the home stretch for taxes in the United States, with the deadline being April 15th. If you have not started already, now is the time to get on top of it.In This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsLegacy MarketsDafi - A New Token Distribution ModelRipple’s Partnership With MoneyGram Is FinishedThe IRS Is Stepping Up EnforcementAnother ETF Approved In CanadaThe Wolf Of All Streets Podcast Ft. Caitlin LongMy Recommended Platforms And Tools
The Wolf Den #194 - Airdrops Are Taxable
The Wolf Den #194 - Airdrops Are Taxable
The Wolf Den #194 - Airdrops Are Taxable
There is no better feeling than realizing an old airdrop, reward, or incentive is actually worth a substantial amount of money and you did nothing to earn it. Traders oftentimes aren't even aware that worthless airdrops landed in their wallets. However, occasionally there are very valuable airdrops, as was the case with Uniswap. You need to consider the tax implications.All varieties of rewards in the DeFi space are considered as "other income" if generated in a non-business manner, or as self-employment income if generated in a business manner. The income from rewards is realized when you receive the reward and is calculated in USD at the market rate. It can get really messy if you have traded the tokens, mixed them in with your investing account, or swapped them.Basically any time you receive crypto for any reason (at least in the US), the transaction is immediately taxable, whether you sell and realize a gain to fiat or not. There have been countless stories of people never "cashing out," seeing the price of an asset they did not realize they owed taxes on crash, and then having to sell at a loss to cover the taxes. Don't let this be you.As you know, I use Blockpit who are also amazing newsletter sponsors. They calculate the taxes for you and make sure that you are compliant. SIGN UP HERE and get a 10% discount.We are in the home stretch for taxes in the United States, with the deadline being April 15th. If you have not started already, now is the time to get on top of it.In This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsLegacy MarketsDafi - A New Token Distribution ModelRipple’s Partnership With MoneyGram Is FinishedThe IRS Is Stepping Up EnforcementAnother ETF Approved In CanadaThe Wolf Of All Streets Podcast Ft. Caitlin LongMy Recommended Platforms And Tools