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The Coming Bitcoin Cash Tax Fiasco

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The IRS taxes income from whatever source derived, and income includes any net ascension to wealth. On August 1st Bitcoin forked, and I magically had Bitcoin cash. There are a few tax problems, and I haven’t seen any solid guidance on this issue.

  • Record scratch: I’m a lawyer, but not your lawyer. I’m explaining my own thinking on Bitcoin Cash and not giving any advice. And there are a lot of Internet experts out there saying that no one has to even pay taxes on Bitcoin cash, because it was free money. PLEASE hire an actual accountant.

On the day of the fork, what was Bitcoin Cash (BCH) worth? As Bitcoin cash was volatile, there’s no way to determine the exact amount. I’ve logged mine at $300 to be safe, as the IRS would love to make an example out of someone to crush Bitcoin, and that someone ain’t gonna be me.

But even a $300 estimate has problems. I didn’t have access to my Bitcoin cash on August 1st, as my hardware wallet didn’t immediately support it. Does that change the analysis as to the date of my net ascension to wealth?

Even honest taxpayers are going to have some complicated conversations with their accountants.

And how does Coinbase’s decision to wait until December 19, 2017 to give people their BCH apply to taxable losses and gains? Coinbase gave people access to their Bitcoin Cash at a cost basis of around $1,889.

Will Coinbase holders be forced to pay income taxes on $1,880 per BCH basis?

This math has real implications.

Let’s say someone had 100 bitcoins on July 31st. On August 1st that person would have realized a net ascension of wealth of between $30,000 and $40,000 (depending on how you price the BCH). Will this be taxed at ordinary income tax rates?

If that same person had his Bitcoin in Coinbase, then she would have a net ascension of wealth in the amount of $188,000. At ordinary income tax rates, that’s a tax bill as high as $73,000.

And how does one calculate the long-term and short-term capital gains tax rates for Bitcoin cash? In the U.S., the top short-term capital gains tax rate is 39%, and the top long-term capital gains rate is 20%.

The Bitcoin cash fork occurred on August 1, 2017 and my BCH are priced at $300 per coin.

If I sell my BCH on August 2, 2018 for (say) $1,200, is my rate the long-term capital gains tax rate on the $800 gain?

What about the BCH Coinbase handed over on December 17, 2017. Must investors wait until December 18, 2018 to sell their BCH in order to take advantage of the long-term capital gains rate?

These are complicated questions, and the IRS has yet to offer any guidance.

One tax accountant suggests that Coinbase users will be taxed as follows:

4. What should I use as the date of the BCH?

The date you had control. This will often be the date of the fork, 1st August 2017. For instance if you held your coins in your own local wallet, e.g. Bitcoin core or Ledger, then you were in control of the BCH private keys on that date. If you held your BTC in an online exchange, it would be more likely the date they were available to you. With Coinbase, for instance, that will not be until 1st January 2018.

Although I can’t vouch for that website, their analysis is consistent with my research and understanding of tax law.

Anyhow, these are complicated issues and the IRS would love to destroy some people.

Please hire a competent tax professional and pay your taxes on cryptocurrency.

Read now: Exodus Wallet Review.

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Bill Clinton on Jeffrey Epstein Island, Victim Claims

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Former President Bill Clinton was seen with two women on Jeffrey Epstein’s “pedophile island,” according to Virgina Roberts.

In newly unsealed documents, Virgina Roberts directly implicated Clinton in an April, 2011 interview. (You can read her full interview here at this link.)

The relevant except says:

When you say you you asked him why is Bill Clinton here, where was here?

Roberts: On the island.

JS: When you were present with Jeffrey Epstein and Bill Clinton on the island, who else was there?

Roberts: Ghislaine, Emmy, and there was two young girls that I could identify. I never really knew them well anyways. It was just 2 girls from New York.

JS: And were all of you staying at Jeffrey’s house on the island including Bill Clinton?

Roberts: That’s correct.

He had about 4 or 5 different villas on his island separate from the main house, and we all stayed in the villas.

JS: Were sexual orgies a regular occurrences at the island of Jeffrey’s house? Roberts: Yes.

 

 

Bill Clinton is directly implicated by an eyewitness in the Jeffrey Epstein sex trafficking ring.

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Jim Jordan Sells Out Conservatives to Big Tech (Read the Confidential Memo in Full)

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Labelled “Confidential,” the Jim Jordan Memo is something you’re not supposed to see.

Cernovich Media has obtained this Memo and is posted it in full.

Read the Jim Jordan Antitrust Memo here:

Highlights of Jim Jordan’s Antitrust Memo

  • The Memo gives Republican talking points needed to defend Google, Apple, Amazon, and Facebook.
  • The Jim Jordan Memo is clear. Zero antitrust action against Apple, Google, or Amazon will be supported by the GOP, and the memo is loaded with talking points defending Big Tech’s monopoly power.
  • “Even if this hearing suggests that Google, Amazon, Apple, or Facebook have acted unlawfully, that would not necessarily mean underlying antitrust law needs an overhaul.”

Watch my Video Report of the Jim Jordan Antitrust Memo here:

 

 

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Cigars, Networking, and Mentorship

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My brother Dr. Melvin Armstrong Jr. and I will be hosting a private event for his non-profit, which pairs at-risk teens with mentors. (Get tickets here.)

Ticket includes dinner, cigar, and upscale conversation in a fantastic venue.

Come out, ask me anything, hear some talks, and vibe. If you’ve attended a previous event, you don’t need a hard sell. (And frankly these tickets will go fast as we are capped at 20 people.)

If price is an issue, keep in mind that 100% of ticket sales will go to Dr. Armstrong’s non-profit and contributions are tax-deductible. (As always get with your accountant with receipts.)

Tickets are available here.

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