PulseX

[SensibleandHourly]

Good morning, 

Just saying, I am extraordinarily skeptical of virtual currency. However, more and more clients'/prospects are asking. Here is the latest scenario, and if there is an IRS bulletin, or blurb, or industry article that anyone feels like sharing, that would be fabulous. 

Latest example, Prospect asks about PulseX, where you 'sacrifice' your $$ to purchase credits. Since you are sacrificing your dollars, it is not a true investment, so that you can avoid capital gains tax, and taxes, all the while making gazillions of dollars.

OF COURSE, I expressed above mentioned skepticism, but I must admit this verbiage was new to me. 

Thank you in advance. 

Is it April 18th yet? 😉 

Dawn 

[qbteachmt]

It's not just dollars; it includes crypto.

"These Sacrifice Points are not meant to have any monetary value. Remember, you're not buying anything, the world is just noticing you are amongst a group of people that sacrificed to make a political statement. Some countries tax their citizens when they receive things of value. PLSX is designed to start with no value, which is ideal."

You are not avoiding capital gains. You are spending, not investing. Then, you hope to be airdropped, and that will be Income. Not Capital Gains. Specifically, they seem to explain why they are not subject to Howey:

"The U.S. Supreme Court's Howey case and subsequent case law have found that an "investment contract" exists when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.[5]  The so-called "Howey test" applies to any contract, scheme, or transaction, regardless of whether it has any of the characteristics of typical securities.[6]  The focus of the Howey analysis is not only on the form and terms of the instrument itself (in this case, the digital asset) but also on the circumstances surrounding the digital asset and the manner in which it is offered, sold, or resold (which includes secondary market sales).  Therefore, issuers and other persons and entities engaged in the marketing, offer, sale, resale, or distribution of any digital asset will need to analyze the relevant transactions to determine if the federal securities laws apply."

This is from the PulseX terms and conditions:

"Wherever possible you agree there is no investment of money. Wherever possible you agree there is no common enterprise."

"The only thing we know of set to be airdropped for free to this political group so far is PulseX (PLSX.)"