And messages can be signed too and in the message can be the info required
But in any event once the conversion begins, I would think the price of MAID will drop towards zero anyhow, creating a loss for everyone
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The purpose of converting is to give future created safecoin value by the conversion which makes MAID worth zero, but that is what it should do.
Or did I misunderstand you.
At conversion exchanges drops trading MAID and start trading Safecoin. So there is no loss, only conversion of value.
A conversion is a swap of value, not a loss.
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I was thinking of MAID held by people in their wallets.
But yes for exchanges there is a clear conversion and no net value change.
For the personal wallets then there is the situation that the safecoin received is for purchasing resources and thus zero value. Most governments like ours see buying crypto to purchase items as a zero gain/loss transaction in respect of the crypto
Now if the person sells safecoin for a profit then that would fall under a trading profit and different countries see these one off profits differently.
For instance in Australia that would be a capital gains (if held for more than a year from purchasing MAID)
Other countries do not tax them at all
In my head there is no difference between exchanges and personal wallets. Both individuals and exchanges updates to a SAFE-network wallet and use the same keys to access the funds. The only thing changed is the underlying technology and the label, but the value and amount have not changed. It should in my mind be seen as a label change and a conversion/swap, there is no need to talk about any loss as no loss would have happened.
MAID is representation of Safecoin, they are and represent the same asset. So you handle it as any brand conversion, the name changes but the asset is the same and represnting the same thing as before the conversion. If for example Apple change it’s name to bananas then bananas still are the same asset as when it’s name was Apple.
I guess as long as you claim SafeCoins with the key to your MaidSafeCoins and still have access to your MaidSafeCoins this should essentially the same as an airdrop and taxed the same way. AFAIK, airdrops are usually considered gifts of value 0 and you then pay capital gains tax when they’re sold.
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Simple rule:
If you can not sleep well with feeling of paying such a tax for not a good reason, than do not pay and cover it as much possible.
If you can not sleep well with feeling that you did not paid tax as you should, just pay it!
There is actually a huge difference. The difference is like trading of debts, accounts, etc. and you having credit at a store.
- The safecoin in an exchange is the definition of being a trader.
You can argue perhaps you did not trade and reduce any tax burden, but still it is the trading platform and purpose is to trade between coins. - The safecoin in your wallet (its on the safenetwork in your account) is the definition of having credit at a store that you can use to buy things.
This creates a different purpose of the coins and thus not a trader and different tax rules in most countries.
Now it is possible to transfer your coin on the safenetwork wallet to someone else for exchange in cash (profit or loss) and that would be treated as a trade. But otherwise it is treated as credit in your store balance to buy resources from the network.
As an example in countries like mine which follow similar rules.
- a trader is taxed as if the “profits” are straight income and taxed. So we have a situation where you pay a greater %age on the dollars earned above certain amounts. EG 20% for 25K to 35K and 35% for 35K to 45K and 45% above that. So if you earn 40K and then make 20K profit from trades then that 20K is taxed (0.35 * 5K + 0.45 * 15K)
- normal wallet on safenetwork then any money taken as profit is taxed as capital gains.
So if have MAID/safecoin for over a year then that 20K profit would result in a taxable income of 10K only and thus in the example above the tax is (0.35 * 5K + 0,45 * 5K)
But if the coins were only used for buying resources then no tax at all
As you can see there is a huge difference as far as tax is concerned
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It seems like we are talking about two different thing and it makes me confused. I might get back to the topic another day or week.
@lubinew That is what I’am trying to explain, there is no value gained or lost because the two names represents the same asset. MAID don’t lose value, it becomes Safecoin and the value of Safecoin is the same as MAID, because the two coins are the same asset. Because future Safecoin is not an new asset or a different asset, future Safecoin is the same as MAID because MAID is only a placeholder for Safecoin.
The problem I had with previous conversation was that it sounded like MAID and future Safecoin are two different assets. MAID and Safecoin represents and are the same asset, when Safecoin is created MAID is converted to Safecoin but the Safecoin is still the same asset as it was MAID, with the same amount/total amount, value purpose as when the conversion happens. There can’t be a tax event just by switching technology and name as long as it is the same asset, as I have read and understanded things. As I understand it there needs to be somekind of gain for it to be an tax event, not by changing name and underlying technology while still representing the same asset. Both MAID and future created Safecoin represents the same asses which main purpose is to buy service and goods in form of storage on the SAFE-network.
As future Safecoin and MAID are the same asset then there are no gains or losses, so there should be no taxable events happening.
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If the exchange is done off a trading platform then
Buy $0.40 Sell $3.00 then buy safecoin at $3.00 Thus resulting from the trade is still -$0.40 since to realisation of the trade into fiat. Unless they are not following trading rules
Now if you sell the safecoin for $4.00 later on then you have profit of $1.00 and pay tax on that. Unless the buying of MAID at $0.40 was done in the same year as selling safecoin at $4.00
Here us an update to the Australian tax authorities actions in the world of crypto
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