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Safemoon Reflections and Taxes

There has been a popular post on this and other Safemoon subs asserting reflections will be taxed when received, much like “mined” coins. No hard evidence was given for this claim. The first comment contains a link to the IRS page referencing virtual currency. Please also read IRS Notice 2014-21 (also within the link). You will see there is no mention of reflections, tokenomics, cryptonomics, etc. We have no reason to believe reflections will be taxed prior to being sold. There are no expenses with reflection, like those accrued from mining. We have seen no evidence any exchanges are going to report reflections to the IRS (if you have proof otherwise, please provide). Of course, any and all sells will be reported (and the IRS will get their money from reflections either way). Reflections could potentially, be taxed similar to mined coins in the future, however we see no proof this is going to happen for tax year 2021 or subsequent years.

What do you think?

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6 Comments

  1. I’d like to think that the this would be like an IRA to where you don’t get taxed until you withdrawal your earnings… especially if you have long term (1+ years)

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  3. You literally only have to pay taxes on what you turn into fiat, I’m not sure why people don’t understand this. Currently the IRS is treating it like an investment and whatever you pull out gets charged 28% short term capital gains tax bc it’s held less than a year. I’ve been pulling gains from crypto for years and always pay my taxes. Not once has my CPA or the IRS questioned anything I’ve done.

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