Capital Gains Tax

[XRPforLong 92]

Hello all,

I heard in a video recently that some lady said that In the future people could take advantage of IOUs by using them in different jurisdictions that are CGT faveourable, thus not having to pay the taxes to the same extent on any appreciation in value. Does anyone know what this is talking about or how it would work? Not sure if this has been discussed. 
Thanks  

 

[Lamberth 1,886]

This is a very interesting concept which I was extensively discussing with my business associates lately. Creating IOU on XRPL is simple and the model would work in principle but only until you add a bad actor into the equation. No matter how we approached the problem, we always ended up hitting counterparty risk and one of its “blockchain flavours” - insufficient oracle capabilities, custody and legal liability of the smart contracts.

There are various Xpring projects which could potentially make it simpler and regardless of what one thinks of Xpring, those guys are creating key building blocks of the XRPL ecosystem from which all of us will greatly benefit in the future. For now IMO this idea can’t be implemented in the real world by a small/medium team.
 

 

[AlejoMoreno 1,626]

4 hours ago, Lamberth said:

This is a very interesting concept which I was extensively discussing with my business associates lately. Creating IOU on XRPL is simple and the model would work in principle but only until you add a bad actor into the equation. No matter how we approached the problem, we always ended up hitting counterparty risk and one of its “blockchain flavours” - insufficient oracle capabilities, custody and legal liability of the smart contracts.

There are various Xpring projects which could potentially make it simpler and regardless of what one thinks of Xpring, those guys are creating key building blocks of the XRPL ecosystem from which all of us will greatly benefit in the future. For now IMO this idea can’t be implemented in the real world by a small/medium team.
 

 

So how does the IOU save on Capital Gains Tax?

[Lamberth 1,886]

1 hour ago, AlejoMoreno said:

So how does the IOU save on Capital Gains Tax?

Depending on a jurisdiction and a use case it could be described either as a barter agreement or a delivery forward. Both a courier who gets a portion of the deliveried goods and a lender who gets a discount for goods in future could be defined via IOUs on a ledger. Additionally, there are some interesting cases of tax benefits which could be collaterized and used via IOUs as well (e.g. in a number of European countries you could deduct a portion of your income before tax to allocate to your future company but it can’t be used until your company is operational). 

Edited May 24, 2020 by Lamberth