hi this is charles hoskinson broadcasting live from warm sunny colorado i have to go take care of some things today but i want to make a brief video because i actually have an interesting tax question that i hope the canadian tax expert can answer because every tax system is a little different there was a recent event where a large amount of money or crypto was gifted unsolicited to vitalik buterin and he decided to pass that through and donate all of it to i think coveted relief and the question i have to a canadian tax expert if this was done in the united states we have something called a lifetime tax exemption it's about 11 million dollars but if you go above that then gifts to an individual are taxed at i think a 40 rate i'll have to double check uh but it's actually taxed so there's 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's not necessarily in all tax systems completely tax deductible so it's an interesting tax question i have is this entire pass-through from the creator to vitalik to india uh a tax neutral event or a tax negative event or text positive event and it brings up a very broad and interesting question which is an attack that a person could do under u.s tax law you know when we have an adversarial mine or information security we always think about these things so hypothetically we could create tax bomb coin and then trade it on a very small exchange to create an unrealistically high value so even if a few dollars trade you could still create a multi-billion dollar value for a coin and then give all of that to a person you don't like and technically under u.s tax law that may be an income event for them at the uh value of that particular token so it is a really interesting thing so i'm not i'm not exactly sure what u.s tax law has to say about this and what canadian tax law has to say about this but it's showing you something that our tax systems are actually not designed for cryptocurrencies uh many people don't understand for example in the united states when you transfer a cryptocurrency from one individual to another individual let's say i have a bitcoin and you give it to your friend bob that's actually a tax event it has a capital gains or capital loss because you've realized value from when you acquired it or lost value from when you acquired it to when you're gifting it to somebody else so there's all kinds of interesting things there for purchases and for gifts and this is actually a very fascinating event for me uh because it's kind of a broader conversation of how do taxes handle the fact that things can have this insane inflated value but not actually have liquidity or the ability to realize that value this is especially true for proponents of wealth tax so if you are a big fan of oh if you have more than 50 million dollars of assets or 100 million dollars of assets you should pay 5 of your wealth every year to the government so elizabeth warren for example is one of the wealth tax pushers well technically one could have hypothetically hundreds of millions or billions of dollars worth of a crypto but let's say that cryptocurrency has no liquidity so you're actually owe a lot but you actually have no ability to realize that that's one of the arguments against the wealth tax especially for when people hold illiquid securities but cryptocurrencies are not generally treated as securities for tax purposes nor are they treated like commodities or other exempt things so all those tax structures that we've enjoyed in the 20th century from stock options other things actually don't work in cryptocurrency land so if a tax lawyer or you know tax expert in canadian or u.s tax law can actually comment on this i'm really curious to see how how it works from that system and in general has this actually ever come up before it's such a large amount of money it's something that a tax authority kind of has to care about over a billion dollars of assets transferring even though we all know that there's really not a billion dollars because the minute you start selling that the price collapses so maybe the fair market value something else but how then do you account for fair market value for a semi-liquid asset that's trading it's in a very fascinating question and that's why i uh brought it up and i hope you guys can cogitate with it anyway i gotta get going have a wonderful day everyone and i look forward to your answers cheers
