I did some purchases via the SocialGood app and I am holding the SG tokens since then mainly because currently it is not really possible to withdraw the tokens.
There are Staking rewards distributed every day and even some Airdrops in the last time (also without purchasing anything). This bonus was great if it would be soon possible to withdraw some parts of the tokens.
As these rewards aren’t cashback, but earnings, the taxable events are an overhead, which cannot be neglect from my side.
Now I am thinking to delete my whole account. I think, that then all the tokens within my account will be gone.
My plan is to communicate the account deletion to the tax office.
Do you think, that then it is not necessary to report the unused and then unreachable earnings within the tax year due to the deletion?
Thanks a lot
Obviously not financial advice……but after filing taxes on crypto for a few years now, and having gone through a couple of crypto tax summits through Mark J Kohler and KKOS, the most common statement I’ve heard is under an audit, is the IRS aren’t a bunch of ducks if you’re being consistent in your filings and you can make a reasonable and logical argument as to why you filed something in a certain manner.
That being said, I’ve accumulated thousands of dollars of SG Tokens. And I filed my SG tokens and MOBILE tokens the same way on last years taxes. MOBILE wasn’t tradable, didn’t even have a projected value during genesis, and therefore had no value in the sense of the USD. SG, even though it had a value, had no means of converting it to fiat. I treat it as Monopoly money. If I can’t physically put it in dollar form in any way, I don’t know how the IRS could possibly consider it having any kind of value. On my 2023 taxes, I intend to file my MOBILE income as zero value until it became tradable and able to be converted to fiat. Then, consistently using the First In First Out (FIFO) method I’ve done on all crypto to fiat exchanges, pay capital gains from a zero dollar value to the price I sell at. And from September to end of year when MOBILE had a means to get to my bank account, consider the daily earnings as income.
I have a friend that is an auditor with the IRS and she’s supported that as long as I’m logical and consistent, if the IRS does happen to audit me and determines I owe money on what I’ve earned and didn’t file correctly, I won’t be charged excessive fees or back taxes on whatever they deem I owe.
Again, not financial advice. Seek a professional on the matter. I’m having a face-to-face with KKOS tax advisors on Jan. 8th. Feel free to reach out to me directly after that if you’d like to hear the outcome of that. Message me directly if you want my contact info.
Happy New Year!
Thanks a lot for your interessting insights and for the offer to contact you about the outcome of your talk with KKOS tax advisors.
I will message you directly and I am looking forward to hear the outcome