Forsage partners own smart contracts and by referral , partners earn Ethereum virtual currency. This would be a Schedule C, as it is actively running business, therefore, all their commission paid in ETH is taxable and subject to self employment income. A partner can use those ETH commission to buy more contract in order to have more commission opportunities.

I think there is 2 part to this, the commission earned as taxable income, and later on when ETH is converted to dollar, will result in capital gains depending on basis and market value.

Is my understanding correct? If one individual owns 100 000 worth of ETH, US resident, do they need to file FBAR?

rbynaker

Level 13

It depends.

Buying & selling, it's just like any other investment.

"Mining," on the other hand, probably belongs on a Sch C.

The way I think about it, if your money made (or lost) money, that's an investment. If your time made money, that's earned income. Next we can debate whether or not the activity rises to the level of a "trade or business" but I'd say mining probably belongs on a Sch C in most cases, subject to SE tax.

Rick

sjrcpa

Level 15

db provided more info here

Forsage partners own smart contracts and by referr... - Intuit Accountants Community

The more I know the more I don’t know.

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