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29 lines
1.8 KiB
Markdown
29 lines
1.8 KiB
Markdown
---
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title: What are my tax obligations when earning LBC?
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category: publisher
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order: 10
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---
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**Important note:** LBRY Inc is providing these guidelines as a service to creators in computing their taxes. These are just general guidelines for users in the USA as understood by LBRY. Creators are encouraged to seek tax guidance from a licensed CPA.
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## Income and gains taxes
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**Two different US taxes can apply on earned cryptocurrency: income tax and capital gains tax.**
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1. **Income tax** - the total value of LBC earned in a year must be declared as income on the annual US tax return.
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**Example**: You receive 10,000 LBC when the price is $0.10. You must declare $1,000 USD in income.
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2. **Capital gains tax** - the difference between the price LBC was received at vs the price it was sold at.
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**Example**: You receive 10,000 LBC when the price is $0.10. You sell it immediately for USD. You owe no capital gains in this scenario.
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**Example**: You receive 10,000 LBC when the price is $0.10. You hold it for 3 months and then sell it when it is $0.15. You must declare a $5,000 USD capital gain, which is then taxed at your short term capital gain rate.
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## Official guidance
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The IRS has established detailed guidance for these transactions [which can be found here](https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions).
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## Sample tracking spreadsheet
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We are providing [a sample Google Sheet](https://docs.google.com/spreadsheets/d/1GzH322hB-eyC3NYCgAhUAVQwjodIlTgRU8omVxIHH0Q/edit#gid=1608975425) that can be copied and used for your records may help you keep track of this.
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## Reporting and app data
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We'll be working on adding more of this information into the Creator dashboard for easier consumption as well as adding better export options for historical earnings.
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