Question about taxes
Question about taxes
If I donate XMR to e.g. the developers of a free software project, how are taxes handled? Is the developer assumed to report his profits to the state and handle the taxes or do most devs just keep 100% of the donation?
If it would somehow be made public that I donated x amount to a dev and that neither of us payed taxes, would the dev be taken accountable or me or both of us?
Dont convert monero to fiat. Then you didnt "gain" anything. NOTE: i am not an accountant and this is NOT legal advice. You choose to follow local laws or not yourself.
This is correct, the state has no jurisdiction over Monero. Once you use their toxic fiat system that is when they hook into you.
Of course they will try to trick you into thinking they own you and everything you do, this is the devilish deception and tactics they use as they have a firm grip on most people via sophisticated fear based mind control.
Only pay if you are content with what the state is doing.
If the state is spending 50% of tax revenue on murdering people around the world then you may not want to contribute to this. It is up to you. Monero = freedom.
It depends what country you're in. In the US, you get a tax cut for charitable donations. It has to be donated to a nonprofit.
So say you buy xmr for $100 and donate it when it's a value of $150. Normally if you sold it, you'd owe capital gains taxes on the $50 profit. Since you donated it, you have a write off for the full amount of the value at the time of the donation, so your capital gains at the end of the year get taxed their value minus the charitable donation, which is $150 in this example.
If the dev is running a nonprofit, they don't owe taxes. If they aren't, the entire amount is taxed as income, plus capital gains when they sell if they sell later for a profit.
If the dev isn't running a nonprofit, and you donate to them, it isn't a charitable donation, it's a gift. You'll owe taxes on the capital gain (taxes on $50 in the above example) and you have a lifetime gift limit that you can gift with no tax liability, but once you reach that limit you'll owe taxes on all subsequent gifts. I believe this limit is $10,000,000.
Again. This is for the US. I don't know what country you live in. Some countries tax nonprofits, don't allow you to write off charity, have no gift taxes, some even have no capital gains taxes. Some countries the recipient of a gift pays tax, some the giver, in the US it's the giver.
XMR donations to the MAGIC Monero Fund, which funds Monero research and development, are tax deductible for the donor if you file taxes in the USA: https://monerofund.org/ . Or donations can be made anonymously in XMR if donors do not care about making tax deductions.
Recipients of funds, i.e. devs and researchers, must KYC to MAGIC. It's a system that works for some devs. Others can use Monero's Community Crowdsoucing System (CCS).
(I'm on the MAGIC Monero Fund committee.)
Don't comingle funds! While we are talking about it, if you have a business or some revenue generating effort, use a different wallet for it. Don't mix personal money and taxable income. Your accountant will thank you, keeping these funds separate makes life much easier when doing the accounting, paperwork, audit, etc.
The main question for you as a donor is if you're expecting it to be a tax deduction. If so, you might want to let give a heads up.
Donors don't have to report anything, though. So if you don't want to report donations, you don't have to. For you, it doesn't matter whether the donation gets reported by the receiver.
The issue is if the same tax agency sees a donations being charitable donations being claimed that exceed the reported income from donations, because then they know someone reported incorrectly.
You should obey all your applicable tax laws. If you realize a taxable gain on your Monero holdings you should pay tax.
If you donate Monero to someone then they are responsible for the taxes on their end.
Obviously consult your CPA, Accountant, tax attorney for actionable advice.
That makes sense, thank you!