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I invented a new technology that kills your gain taxes on crypto transactions and trades... or so I think :)

I am hoping that this is the case but I am not really sure and I would like you to tell me if my approach is correct.

The idea is simple, instead of making transactions you are making a promise to make the transaction at the upcoming first of the month. D.T.P, my new technology enforce the promise or the deal. It's working not only for your transactions, but everyone's else too.

When the first of the month is coming, an actual transaction is made simultaneously for everyone. It's the point when your coins will go out your wallet, and any pending coins will go in.

The crucial question here is how the cost-basis is calculated? I hope that it is calculated at the moment when the actual transaction is happening. This way the cost-basis of sending and receiving the coins is the same, and you can say that you used the collected coins to make all the transactions. In which case the tax will be zero as the price didn't change.

This trick can only work on transactions during the same month when you use coins that you received to make trades, for those trades you should not pay gain tax as it's 0.

Please tell me if I make sense and if it can work in the U.S.

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    Just curious, how do you see these contracted transfers as being different from other transfers? – Hart CO Jul 6 '18 at 22:36
  • The actual coins are part of the public ledger, they are recorded in the blockchain, and their state is final, I call those the actual transactions. – Ilya Gazman Jul 6 '18 at 22:42
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    Combining transactions has no impact on the tax situation, because we are taxed on net gain for the year. – Hart CO Jul 6 '18 at 22:56
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    It doesn't matter when I get paid, if I make money, there is tax implication. If I'm selling apples for exactly what they cost me, there's no gain anyway. If I don't get the coins now and don't get to reap the benefit of their rise in price, then I've lost money. If it's delayed payment then I still have gain, it's just delayed. No impact on tax situation. The only way you can spare people capital gain tax is to remove their gains. – Hart CO Jul 6 '18 at 23:10
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    Let us continue this discussion in chat. – Ilya Gazman Jul 6 '18 at 23:14
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Wrote this in chat but I thought it might as well be an answer to your question.

This will be treated as a derivatives. This is essentially a cryptocurrency swaps contract, sort of. The "promise to exchange" has a value that can be calculated and this creates a capital gains / loss. Therefore, the settlement in crypto may not yield much, if any, capital gains / loss but the "promise" itself will. You are not escaping taxes this way.

  • Also, if you are in the US I would advise discussing with the CFTC, at the very least, before launching this. They have what they call the CFTC lab that can be reached for that type of novel product ideas. – ApplePie Jul 7 '18 at 11:38
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I invented a new technology that kills your gain taxes on crypto transactions and trades.

No you didn't.


from the chat, here's the answer though I stand by my previous answer:

You're talking about lending, this is a credit card.

I go to the mall and buy shoes, I authorize payment on my credit card promising to pay the credit card bank, my credit card bank pays the mall, I get the shoes today, I pay the credit card bank next month.

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    Please be so kind and provide a complete answer. – Ilya Gazman Jul 6 '18 at 22:51
  • Just like an option, I didn't buy the stock, I bought the option to buy the stock, the value of that option fluctuates and I gain or lose based on the value of the contract. PLENTY of people owe taxes on crypto gains for transactions that may never have been recorded to the blockchain. You haven't invented anything, this doesn't circumvent us tax tax law and it's not actually avoiding a value gain (or loss). – quid Jul 6 '18 at 22:54
  • Unlike options, you cannot avoid execution. It is scheduled for the first of the month no matter what. Unlike options, you can't trade the promises or the deals in my system. Those are just events. – Ilya Gazman Jul 6 '18 at 23:08
  • If you buy some thing. Then the value of the thing goes up. Then you relinquish your ownership of that thing. That's a taxable gain. This feels like you have no real understanding of the mechanics of a capital gain. – quid Jul 6 '18 at 23:37
  • Except I don't buy, I only make a deal to buy at a given time. And at that exact time, I also relinquish some of the assets, so there is no change in the price. – Ilya Gazman Jul 6 '18 at 23:43

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