Cardano (ADA) Charles Hoskinson about Tax Bomb Coin and Beyond Tax Laws

ADA Advocates pointed to how Cardano is superior technologically and ethically. And on how the Cardano Foundation is comparable to Neuralink, Tesla, Starlink, SpaceX, Microsoft, etc. The future is in your hands.

Meanwhile, Charles Hoskinson wanted to have a Tax Question answered, pointing to how a Canadian Tax expert can answer that question.

“Every Tax system is a little different. There was a recent event where a large amount of money – of crypto was gifted unsolicited to Vitalik Buterin. And, he decided to pass that too and donate it all of it too, I think Covid Relief.

And, the question I have to Canadian Tax expert:  If this was done in the United States, there will be something called a tax exemption for about a 11 million dollars, but if you go above that, then gifts to an individual are taxed at 40% I have to double check, but it is actually tax.  So, there is a tax event to move the money from Alice to Bob. So, in this case from one protocol to another. And, then when one donates that is not necessarily in all tax systems completely tax deductible.  So it is an interesting tax question that I have.

This entire pass through from the creator to Vitalik to India – is it a tax neutral event or tax negative event or tax positive event?

This is a very broad and interesting question which is an attack which a person could to under US tax law. Hypothetically we could create a – Tax Bomb Coin.  And, then trade it on a very small exchange to create unrealistically high value. So, even if a few dollars trade, you could still create a multi-billion dollar value. And give all of that to a person you don’t like.  And, technically under US tax law that may be an income event for them at the value of that particular event. So, it is a really interesting thing. I am not really sure as to what the US Law has to say about this and what Canadian Tax law has to say about this. But, it is showing you something that our tax systems are not actually designed for cryptocurrency.

Many people don’t understand for example in the United States when you transfer a cryptocurrency from one individual to another individual that is actually a tax event. It has capital gains or capital loss – you have realized value when you have acquired it or you have lost value when you have acquired it or when you are gifting it to somebody else.

So, there are all kinds of interesting things there for purchasing things and gifts. How can taxes handle the fact that things can have this insane inflated value, but not have the liquidity or the ability to realize them. This is a specially proved component for wealth tax”

Charles Hoskinson stated that this was a very fascinating event for him.