My query is about paying taxes on daily interest earned from lending coins like Lendconnect and Regal coin. The only thread I found out on the net involved Bitconnect and the best answer seemed to be to report your interest income on IRS schedule B (for the United States). Ironically, the thread ended with a post asking what to do if Bitconnect shut down and ran off with all the money.
I won't report these "earnings" as interest income to the IRS because all I have is a page on some web site from some anonymous techie people that my $1000 has earned 3 gazillion dollars in interest. The lending platform is not a licensed financial institution nor will it be sending 1099 forms to the IRS. So how can I be expected to pay thousands of dollars for interest supposedly earned on puke coin or whatever platform it is? It's impossible to say these platforms are not scams or that they won't be gone tomorrow... with everyone's BTC.
It said in the thread that I mentioned that at least one CPA said you should pay tax on the interest when you convert the interest earned to USD. I can't see any alternative to this because I won't know if I've truly earned the interest until it's in my hand. Just because Joe Blow with a website says I've earned thousands in interest shouldn't make me liable for taxes.
I have no problem with paying taxes. My problem is paying taxes on phantom income.
Can anyone add any clarity to this topic?
Arent you aware on the latest issues where Bitconnect is involve on? If I were you don't bother to make investment with these lending platforms even you do said that not all are scams but I do strongly believe that all of them are scams specially when they do offer too good to be true returns in a short period of time. Self sustaining wont really be possible into these platforms which would normally end up on becoming a scam and sad to say its the reality.
