
Ask HN: Tax Implications of Ethereum Smart Contracts? - whoisjohnkid
Hey Guys,<p>I’m thinking of building a web based app that uses smart contracts. If my app takes a percentage of a given transaction how does the IRS view that? Is it only taxed if I convert that to FIAT?<p>Hoping some of you have experience with this.<p>I also wonder if a given app utilizes smart contracts if that is considered a money transmitter business.
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charlesdm
The taxable value will likely accrue at dollar value at the time you receive
the fee.

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whoisjohnkid
Ahh I see thanks Charles! Yeah I’m reading up all I can about this subject
atm. Curious to see if any fellow HNers have been down this path.

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charlesdm
I'm not American, but the thing with taxes is (especially if things are
undefined / unclear in the law) that you need to go with the most straight
forward solution so the tax authority can't call your "solution" unreasonable.

If you earn $100, you'll pay corporate tax on $100. If you earn 1 ETH on the
1st of January, and the value of 1 ETH at that point is $500, then you should
value that ETH at $500 and pay the tax on the corresponding dollar value (in
this case $500). You're not going to run into any problems there, as it is
pretty much the most reasonable approach.

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whoisjohnkid
Thanks for the input. Yeah I suspect it may be this way.

