Many believe when you "receive" cryptocurrency - mining, staking, hard fork, smart contract, etc that the receipt is taxable.

It can be, but an important element is that you have "dominion and control."

2) If the smart contract restricts your use of the new crypto and/or if you are restricted from transferring/spending it, you may not have "dominion and control" and your receipt may not be taxable until such time.

Archer vs. Coinbase cemented "not your keys, not your coin."
3) This case showed that if @Coinbase held your private keys, it didn't have to give a hard fork when earned.

Thus, if you hold a token through an exchange that controls your private keys, an airdrop isn't necessarily taxable UNTIL...
4) ...the exchange gives you full access to the generated tokens.

At one point @Coinbase held access to a hard fork of $BCH on $BTC. It was "yours," but you couldn't transfer/spend it.

If you picked up tax on that "receipt" or anything similar, you may be entitled to a refund.
5) If you think you have claimed tax on receipt of tokens that you didn't have full control over, speak with your paid tax advisor about getting a refund.

Please like and RT the first tweet in this thread to help others be aware of potential refunds!

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More from @AskForTaxAdvice

15 Sep
1) What does the democrats' proposed tax plan mean to YOUR WEALTH?!


This is my real time summary.

I worked very hard on this so please like and RT!!!

People need to know what is bill could do to their taxes!!!

2) Increase the top individual federal tax rate from 37% to 39.6%. It's already too high!😡

This applies if your taxable income exceeds the following:

-Married - $450,000
-Head of Household - $425,000
-Single - $400,000
3) Increase the top CAPITAL GAINS tax rate from 20% to 25%.

This applies if your taxable income exceeds $400,000.

If you trade and make $1,000,000, that's another $50k of tax you will owe.😡
Read 11 tweets
10 Sep
1) Every tax loophole I know.

No sales. Pure content.

If you appreciate my stuff, push this huge thread!!!

Let's get this community to 15k followers today!

If this group gets big enough, I could do so much more for you.

RT! Like! Tell your mother! Let’s go!!!

2) Pre-loopholes

Tax needs to be part of your wealth strategy!

How much of your income you keep matters even more than how much you make.

Tax is your largest expenses. Tattoo that on your wallet because it’s the truest thing you’ll read today.
3) Sending money to make money = deductible!

I’ve written threads on deducting your vacation. Even getting paid to go on vacation.

If you are speaking money and it relates to a profit motive, there is a good chance you can deduct it. Start capturing these expenses for analysis.
Read 46 tweets
8 Sep
When do I NEED to form and LLC for my business or side hustle?


Hit this with a like and RT to help your friends. Everyone has this question!
2) Upfront, you have to ask this question from multiple perspectives.

There is an answer for legal purposes.

There is an answer for tax purposes.

There might be an answer for commercial purposes.

I'm going to address the tax aspect directly.
3) From a tax perspective, if you are the only owner (called a "Member" in an LLC), the IRS does not see the LLC as distinct from you. It is "disregarded" from you for tax so it doesn't matter.

(You can elect to regard it, but that's another topic.)
Read 13 tweets
8 Sep
***Tax Loophole Extreme Alert***

You've heard of the ROTH IRA *yawn*.

Maybe your cousin taught you how to do a "backdoor" ROTH IRA 👊. We all feel good about this.


Show your love to your neighbor with a like and RT!!!

2) First, you need a 401(k)

It can be with your job or a solo 401(k).

In 2021, total annual contributions to a 401(k) are limited to $58,000 ($64,500 if over 50).

That's right, the $19,500 is not the limit. $19,500 is the limit for the employee to put in tax-deferred.
3) Example

Say you make $100,000 and put in your full $19,500 and your employer matches 6% or $6,000.

That's $25,500 of contributions, well short of the $58,000 eligible...$32,500 to be precise.

"So what??"
Read 11 tweets
26 Jun
Hearing a lot of traditional investment vehicles being attacked in this community:

-401k matches aren't worth the opportunity cost
-529s are a stupid way to pay for college
-Taxable brokerage over IRA

Fine. Sure. However you feel.

But I think three things are being overlooked:
In each of these cases, I'm talking about contributing up to the match. An effective 100% instant return.

Keep that in mind as you read through.
1) Psychology

It's true, if you had taken your 401k contributions to get the match and invested in other assets, you could be doing better than the match, but can you psychological handle DCAing 5% of your earnings...
Read 11 tweets
25 Jun
Quick read to ID holes where you are overpaying tax.

If you make money in the US, this is for you.

Like and RT folks. I write these for everyone so share.

Saving for retirement

If in your early working years, are you using a ROTH IRA or ROTH 401k?

If in your peak earning years, are you using deferral, e.g., a 401k, SEP, etc?

Are you using another strategy like whole life insurance to be your own banking vehicle? @ChroniclesNate
Saving for retirement

If you aren't in peak earning years, but make too much for a ROTH IRA, are you using a ROTH conversion strategy?
Read 11 tweets

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