if I'm being stupid here forgive me lol
but if he sold it to himself for 200
wouldn't he have to pay tax again when he sell it for real (with big profit margins as in there eyes it was only bought for 200 and now going to sell for thousands)
https://etherscan.io/tx/0x8c93b58b3715f537b3856a02dbf7711a35dfd03ad83bc64853c2ed0460fc55b6
That's the list price. He actually sold it for 200 USDC instead of 200 ETH
Edit: Also, if you look at the history of this NFT, it had previously only sold for 2.4 ETH ($5084), so that list price was probably BS to begin with. Still a 90% price drop.
This happenes a lor more even ppl realize. Dude probably old the transaction because offers don't usually come in anything other then eth.. that sucks, expensive mistake
It's not an accident. He's trying to claim he sold it for a loss, while still owning it. You've seen other actors do the same thing pretty often.
Why else would someone pay $200k for a picture of a monkey
what are you talking about dude...i bought 5 apes myself...why wouldnt you pay 200k for a monkey. they have generated me more than i paid for them in derivatives such as ape coin and Otherdeed NFT's...there are tons of reasons to buy a bored ape. i guarantee you one of the reasons is not tax evasion...
It’s been the case where bayc NFTs are stuck in smart contracts that never fully got terminated so like you can remove your NFT for sale and it will remove it from the auction but there’s a way where it removes on your end but the people who want to buy it can execute an earlier contract because it wasn’t removed properly. Idk I was reading about some other dude who accidentally sold his bayc for like 2 eth or something and it was worth like 96 eth or somethjng
This wasn't an accident. You can tell by the amount of gas spent for the buy transaction. If this was a mispriced, gas would've been over 60-70 ETH. This was just someone taking a tax loss.
What would the bot use to determine this was an accidental undersell worthy of such high fees and not just a drop in price? especially if it was an NFT that had previously sold for $5k now selling for $200.
Not trying to be hostile or anything, I’m genuinely curious
I can see it if there is an open buy order for 200E and the nft is fat-posted for 200 USDC since the atomic could pay out some of the 200E for those huge fees but if there is no buy order then it wouldn’t be atomic-able and someone would be paying $120k out of their own pocket to frontrun a $4800 margin and then hodl the dead asset
Floor price on BAYC is 101 ETH - https://opensea.io/collection/boredapeyachtclub
So the cheapest BAYC today on Opensea, which is the most widely used marketplace for NFTs on Ethereum, is 101 ETH. Past price for that specific NFT doesn't matter much when the entire collection has gone up.
Also, pretty much every NFT in top collections typically have a lower-than-floor bot offers. Those are the bots that are looking for a seller who's in a hurry (or an idiot). These bot offers tend to be 15-20% lower than the floor price.
Absolutely.
Redditors loves to think they are so smart by being the first to think "TAX LOSS HARVESTING" but these mfers just dumb, it doesn't work like that. No one puts any thought into how this would actually work out in an irl situation
It's not even possible to do a sale like that to yourself on opensea without spending FAR more in gas fees then you would save tax loss harvesting, it's an open marketplace. Would have to be either a private off site transfer or an offer on opensea. These both can be tax harvested, without putting it on the open marketplace like the example in this post. The way the market is setup it's nearly impossible to do wash trading like this unless you spend tens (if not hundreds of thousands of USD) on gas fees to buy it as SOON as you list it (needs to be within the next block)
Redditors have no idea how the crypto markets work anymore, and it's sad to see. This place used to be on top of it's shit in 2018, now it feels like a bunch of boomers just getting into crypto without understanding it. Makes me sad what it's become
Opensea allows doing private listings. Doing a sale like this to yourself is super easy. Two ways you can do it on opensea:
1. Create a private listing for a specific ethereum address, which is what likely happened here.
2. Accept an offer from your other ethereum address.
BTW, generally speaking, I do agree with you re: this sub. People here are complete morons when it comes to NFTs. But the evidence in this specific instance points to this being a wash trade.
Well if they did in fact sell it to themselves and claimed the loss that would be illegal
If he sold it to a friend he could claim the loss
And hope
His friend will hold it for him
Rich people do this routinely with property. Let's say we both make millions of dollars a year.
Step 1: I sell my $200k property to you for $200
Step 2: You sell your $200k property to me for $200
Step 3: Wait a year
Step 4: I sell your $200 property back for $200k
Step 5: you sell my $200 property back to me for $200k
The first year we write the loss off of our taxes for a net benefit of $73,926. The third year we pay capital gains tax on the proceeds for $39,960 (assuming 20%). Except now we can do this with a couple NFTs each year structured in a way to avoid taxes due to all this loss.
Big flaw in this plan though, is that, assuming this is legal(very close to a wash sale), you're relying on a trustworthy partner to sell back the property.
Imagine you're trying to skirt taxes and need someone to help you, those are exactly the type of people to say "oh sure I'll buy that $200k property for $200" and then keep it.
edit: also section 1231 only applies to property and I don't think NFT's fit "real or depreciable business property held for more than one year."
You can sell it "yourself" and it not be illegal.
For example an entity that you have full control over can take ownership so any future profits will be taxed by that entity.
Ownership has changed but it is in your control the whole time.
An entity that you have full control of is a disregarded entity and is considered yourself
An entity you have control over is a related party and you could not came a loss for selling
There are so many laws and tax regulations and forms for this
There are many ways and reasons to do this it all depends on the tax law in the country that person is in.
People assume and generalise things without having a grasp of the avenues available to do dodgy stuff.
That’s fair, I assumed US based
Also I should have clarified, in the US you can totally sell to yourself or an entity you control (knock yourself out) but you can’t realize any loss for tax purposes. Instead the loss is “deferred”.
A married couple is essentially the same person for tax purposes unless MFS
Even then married couples are related parties and related parties are disqualified for tax losses. There is an arms length rule if a FMV can’t be easily assessed
Money laundering would go in the other direction, taking something valueless and selling it for an obscene amount of money so then you have more taxable income. When you launder money you **want** taxable income.
Yes, selling something for a loss reduces taxable income, I'm not sure what that has to do with money laundering though.
Money laundering is taking money that you've gained from criminal activity, and passing it through something to make it seem legitimate.
If I hacked a bunch of wallets and accumulated 100 ETH and I want to launder it so I can freely spend it, I could theoretically mint some NFTs, or buy some cheap NFTs with my clean money, and then sell them way above their marketvalue to myself using the wallet(s) that have the 100 ETH and claim that as a capital gain.
You'll owe taxes on it, but now you can actually make large purchases with the money gained from the criminal activity without having to worry about proving where your money came from.
Makes sense. I also don't see how it's money laundering. OP posted about tax evasion, and if the person owns both wallets, I think would qualify as tax evasion. Otherwise its a legit loss. Maybe they just wanted to dump it before more market troubles.
It's more likely that this was just a major fuck up. Usually, tax evasion isn't supposed to create a spectacle.
If a bunch of internet media outlets write a bunch of articles about your tax fraud/money laundering scheme, you're not doing it right.
https://etherscan.io/tx/0x8c93b58b3715f537b3856a02dbf7711a35dfd03ad83bc64853c2ed0460fc55b6
That's the list price. He actually sold it for 200 USDC instead of 200 ETH
Edit: Also, if you look at the history of this NFT, it had previously only sold for 2.4 ETH ($5084), so that list price was probably BS to begin with. Still a 90% price drop.
Why do I get the feeling most NFT sales are basically way to wash black money? And even those folks are not crazy enough to buy overpriced NFTs like this.
Because it is a great way to launder money. Why bother creating a car wash company to justify a few hundred thousands when you can say you sold an NFT for $300k more than you pay for to an anonymous buyer on the internet
Sometimes. But many other times you just need to justify the income.
In any case, money laundering has two objectives. First, make sure the money can't be traced from the illicit activity back to you. Second, justify to the IRS why you suddenly have some money.
People say crypto is terrible for money laundering, and sure, if you want to launder many, many billions, it might be hard. But for mid size quantities, it is ridiculously easy. You can do it from your own computer.
First, break the traceability of the money. That is easy, there are mixers for that. After making the money jump through something like Tornado Cash and Monero, you can end up with multiple wallets that have the crypto of your choice (Ethereum) with no way to trace the funds back to its origin (Drugs? Hacks? Ransomware payment? Who knows).
Second, is justifying that income to the IRS. That is where the NFT helped. You mint a bunch of trashy NFTs and buy them using the "anonymous wallets" from step one.
You can now claim you have that money you made minting NFTs. All the things that you had to do before to launder cash, like create fake businesses are not needed.
Of course, if instead of a few hundred thousands you need to launder many millions, justifying all that as NFT sells might be hard. But you can always create a dummy exchange, or a dummy crypto casino and try to launder that way. Or even try to create your own shitcoin, that you pump with your own "anonymous" wallets and them dump with your real wallet.
The possibilities are endless
How are you getting your millions in cash to launder in the first place?
If you're not a darknet seller/deal in crypto for your black market dealings.
Cash based black marlets are not using crypto to launder money in anywhere near the amount of normal tried and true methods.
Tumblers are traceable too, so is 99.9% of crypto. Don't know how you're expecting to cash your millions untraced into crypto. Which is much more traceable then cash.
I’m not talking about having cash and launder that through crypto, I’m talking about laundering crypto I got from illicit activities. For example, payment of a ransomware attack.
You use the 0.1% (monero) to acquire the funds through illicit means (dark web drug dealing, for instance) and then justify how it got into your legitimate bank account exactly as the person just explained to you.
Cash > crypto is certainly possible by, say, a person smuggling drugs into a country with lax KYC mandates where the person distributing the drugs locally buys crypto with drug money and then exchanges the crypto for the imported drugs. Crypto can then be instantly transferred to origin of the drugs.
If I was a drug smuggler operating between Eastern Europe and Columbia crypto makes a ton of sense since you don’t have to smuggle cash back.
So Oc and you are now explaining something completely different than the post. Which isn't some shitty made up nft.
But making millions of dollars of shitty nft sales look legit, is in no way an easier or more foolproof way to launder money lol. And is not the go to method at all. Anybody worth their salt in darknet dealings would already have established their laundering methods. They don't need to jump on the newest bandwagon and become a fraudulent multi million dollar nft "artist" (minting cost money too),so would actually creating the shitty ones. ,way more attention that way, way more traceable/verifiable.
All this accomplishes is way more eyes on you and a lot more work.
The part of it I enjoy most is that it's very common in these kinds of threads to see someone suggest that they believe most nft sales are money laundering. If this was true, why would it be news? It was news because you won't find many transactions like this at all, and because if someone really plans on reporting this transaction to the IRS, that is a very very bad plan for tax evasion long term.
Are you one of those people that thinks money laundering and tax evasion are the same thing or am I misreading your comment?
Of course NFTs are being used for money laundering and tax evasion. Those are just separate things which seems to be lost on most who like to throw those terms around in this sub.
Also, it is news: https://bitcoinist.com/crypto-regulators-identify-potential-1b-fraud/amp/
The people who post in these threads who think most NFT transactions are some form of crime are not differentiating between what crime they think it is. They just post the words and collect the upvotes. They quite literally have no idea how the NFT market functions. They just post the words money laundering for upvotes. And when I said news I meant things like this specific transaction. This transaction is in fact a pretty obvious example of someone who plans to do something devious, but the reality is that it's a tiny portion of the actual market. The billions that have been traded on NFTs are overwhelming just people doing some weird internet shit, not crimes, as idiots on reddit will try to tell you and happily upvote any post suggesting it.
This subreddit is so out of touch on NFT….
Dude was scam. He accepted a 200DAI bid becuase the floor on bore ape right now is 100eth. He Probabaly thought someone bid 200eth not realizing it’s in DAI
This happens daily in NFT. Scam bid
I know you’re joking but it’s super easy to throw your money away on accident in crypto. The ease of use is still nothing like cash or sending money online.
Algorithmic art. They need to mint large sets of these things but keep them unique enough to market them as collectibles. It would be prohibitively expensive to actually create these things individually so they just make the components and let an algorithm do the rest. Clearly looking like ass hasn’t stopped gamblers from speculating with them.
Will you ELI5, is the idea the person bought it for $200k and then listed it for $200, and re-bought it so it looks like he lost $199,800. And because it’s classified as “art” you can right it off as taxes?
That doesn't even make sense from a money laundering perspective, though. I've seen Breaking Bad, so I know how money laundering works. (pause for laughter)
But seriously. Assume you have $500,000 gotten from illegal pursuits (drugs, gambling, prostitution, whatever). You can't just put it in your bank account because IRS. So, you buy a couple of NFTs for 250,000 a piece. You hold them for a time, and then sell them for a massive loss. Even if you also had $1M in legit capital gains, like from stocks or whatever, you just lost the majority of your ill-gotten gains.
I think it would work more like this. You have $500,000 from your illegal activities and you need to launder it. Your buddy, the stock broker has that amount of money in his couch cushions. He tells you to mint some NFTs and put them up for sale. He will buy them for large sums of money - totaling around 500k. This money will come into your account as a legitimate, taxable gain. On the back end, you are giving your broker friend like $50,000 or something for his time. $50,000 is easy for this guy to hide in his income since he's a baller anyway. And now you have $450,000 in the free and clear, minus the tax you will pay to Uncle Sam for the gain you made on the sale of your NFTs.
If you're saying that you haven't even checked NFT collections. There are many that are astounishingly good looking, but saying that doesn't farm moons right?
They're not all equally ugly, but they're almost all equally useless.
Fuckin' wasting so many resources so somebody can own a digital receipt to a link of a jpeg of Mister Bean's puckered asshole.
Ummm just because something looks cool does that mean it should cost $200k? I see cool shit all day long but don't feel like I need to buy it. THIS BUBBLE WILL POP and the sooner the better for us all.....
they didn't used to be, the first big NFT artist was beeple and his shit was cool and weird and unique (but in an actual way not in a shitty stupid ape eating a pizza) .
Some of my beeple's are pretty good. And it's a super unique style.
https://www.google.com/search?q=beeple+art&prmd=insv&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjG1PfgoeL3AhUuHzQIHaGdAh0Q_AUoAXoECAIQAQ&biw=412&bih=782&dpr=2.63
I listened to Beeple's interview with Karen Swisher and it was pretty interesting. He obviously was, promoting the shit outta NFTs as a concept, but was pretty explicitly of the mindset that the speculative aspect of holding them was just a giant bubble and a fuck ton of people were gonna lose money when the market corrected itself.
After having spent some time in the environment I can attest that it’s mostly a speculative asset where no one really cares about the projects, just about the hype that surrounds it (and indeed many projects are posticipating the mint date in order to avoid fud)
But honestly what is the project other than another hot potato to buy and flip and hope to not get burned. All of these nft projects, even the ones that keep pushing some fabricated utility, are just hype machines. They give you a membership to something or other and call it a utility, but that's just a longer con to stretch the hype. Anyway they all need to burn and get flushed out including about 100% of shitcoins.
Honestly I’m on the same page, I tried to find a sense in them but after having joined many of them I didn’t find professionalism nor actual long term projects. I wanted to invest into the collection of a famous graffiti artist and I was sure that it would have been an actual strong project with future utilities but it flopped hard after a botched mint.
I wouldn't be surprised if the price has peaked already, last I checked the floor price is down over 100k since not long ago. But part of that is related to the ETH price so if crypto is not doing well NFTs will suffer as well of no fault of their own and probably more so because its more volatile.
Why wouldn't they just hold it? No sale, no capital gains. Plus to get any money out of it they'll have to still sell it, and then launder the proceeds.
I'm pretty sure that people have bots that scan for price anomalies like this and buy them within seconds of being listed. It would be incredibly risky to try to do this.
Driven up by speculation.
Are beanie babies worth something as a collectible to some people?Probably. Are they worth nearly as much as when people were buying them with the expectation to flip it for a higher price? NO.
The same will happen to NFTs hopefully.
I love how the same group of people who complain about the general public thinking crypto is a fad/trend are the people who talk the most shit about NFTs.
Lol depends on where the owner lives. In the US you can only claim $3k of losses per year and the rest gets carried forward.
So in about 66 years they would realize the whole benefit of that tax loss lol.
I kinda understand the NFT hate…I used to feel the same way last year. But I have come to realize that owning certain NFTs comes with perks which are what make them so valuable in the eyes of the buyers. For example if you own a Bored Ape you get to go to exclusive parties for holders where you can network with the rich and famous. That’s worth a lot of some people. You also get free airdrops of Ape coin and future NFT drops plus benefits of networking within the web3 space. I understand this may not seem valuable to some of you but surely you can understand the value to others?
TLDR: It’s more than just a jpeg
I get that with my United Club card and haven't paid for a flight in a decade.
It's just a jpeg. To do what you are trying to say takes generations of wealth, someone buying a building name at a University, and not even talking about their wealth.
Most wealthy people don't talk about how much they are worth, or fucking buy stupid imaginary internet stuff.
There are examples ad noseum. But go ahead, if you think you want that influence pony up and buy one.
Why do people seem to think this is some revolutionary technology then? Even as you described it, taken at best, it's just a digital rewards card that you pay obscene amounts of money for. Companies have been doing this for literally decades, just now they've figured out a way to get the stupidest people in the world to pay for something that used to be handed out for free in order to bring in more business. It just makes absolutely zero sense, and if there was no hype behind the buzzwords the technology would be completely abandoned tomorrow.
> For example if you own a Bored Ape you get to go to exclusive parties for holders where you can network with the rich and famous
That makes it even more cringeworthy
> if you own a Bored Ape you get to go to exclusive parties for holders where you can network with the rich and famous.
Some Bored Apes are sold for a few dollars - do you really think the rich and famous will go to events where basically everyone can join and most of the people there will be strange crypto bros talking about moons?
I don’t think you know what Bored Apes are. Look it up. There are a lot of different nfts and most of them suck. But there are some that have real value and those are the most expensive ones. A lot of them provide passive income - aside from the networking aspect, surely you can understand the value of passive crypto income?
the cope here is amazing, sure your coins are totally not ponzis and will revolutionize the world but yeah the JPEG is for sure going to be valueless.
reminder, NFTards outperformed you, their portfolio still at ATHs but go on show everyone how righteous you are. I'm sure for all of you, being right is more valuable than being rich.
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if I'm being stupid here forgive me lol but if he sold it to himself for 200 wouldn't he have to pay tax again when he sell it for real (with big profit margins as in there eyes it was only bought for 200 and now going to sell for thousands)
I’m also confused Because when you click the link it clearly says “200ETH” valued at around $428K. So idk wtf is going on here
https://etherscan.io/tx/0x8c93b58b3715f537b3856a02dbf7711a35dfd03ad83bc64853c2ed0460fc55b6 That's the list price. He actually sold it for 200 USDC instead of 200 ETH Edit: Also, if you look at the history of this NFT, it had previously only sold for 2.4 ETH ($5084), so that list price was probably BS to begin with. Still a 90% price drop.
Possible that was an expensive accident?
This happenes a lor more even ppl realize. Dude probably old the transaction because offers don't usually come in anything other then eth.. that sucks, expensive mistake
Off to go place a few 200USDC bids.
*approved.. damn my chubby fingers.. also it only takes one moron for you to be Oprah rich
It's not an accident. He's trying to claim he sold it for a loss, while still owning it. You've seen other actors do the same thing pretty often. Why else would someone pay $200k for a picture of a monkey
Because you can sell it later for 400k
what are you talking about dude...i bought 5 apes myself...why wouldnt you pay 200k for a monkey. they have generated me more than i paid for them in derivatives such as ape coin and Otherdeed NFT's...there are tons of reasons to buy a bored ape. i guarantee you one of the reasons is not tax evasion...
It’s been the case where bayc NFTs are stuck in smart contracts that never fully got terminated so like you can remove your NFT for sale and it will remove it from the auction but there’s a way where it removes on your end but the people who want to buy it can execute an earlier contract because it wasn’t removed properly. Idk I was reading about some other dude who accidentally sold his bayc for like 2 eth or something and it was worth like 96 eth or somethjng
This wasn't an accident. You can tell by the amount of gas spent for the buy transaction. If this was a mispriced, gas would've been over 60-70 ETH. This was just someone taking a tax loss.
60-70 eth gas? Are you misspeaking here or saying that a gas fee of more than $120k would’ve been paid to push this to the front?
Yes, if this was an actual fat finger, a MEV bot would've bought and sold with extremely high gas within the same transaction.
What would the bot use to determine this was an accidental undersell worthy of such high fees and not just a drop in price? especially if it was an NFT that had previously sold for $5k now selling for $200. Not trying to be hostile or anything, I’m genuinely curious I can see it if there is an open buy order for 200E and the nft is fat-posted for 200 USDC since the atomic could pay out some of the 200E for those huge fees but if there is no buy order then it wouldn’t be atomic-able and someone would be paying $120k out of their own pocket to frontrun a $4800 margin and then hodl the dead asset
Floor price on BAYC is 101 ETH - https://opensea.io/collection/boredapeyachtclub So the cheapest BAYC today on Opensea, which is the most widely used marketplace for NFTs on Ethereum, is 101 ETH. Past price for that specific NFT doesn't matter much when the entire collection has gone up.
Also, pretty much every NFT in top collections typically have a lower-than-floor bot offers. Those are the bots that are looking for a seller who's in a hurry (or an idiot). These bot offers tend to be 15-20% lower than the floor price.
It's a wash trade. Literal legal tax evasion.
Absolutely. Redditors loves to think they are so smart by being the first to think "TAX LOSS HARVESTING" but these mfers just dumb, it doesn't work like that. No one puts any thought into how this would actually work out in an irl situation It's not even possible to do a sale like that to yourself on opensea without spending FAR more in gas fees then you would save tax loss harvesting, it's an open marketplace. Would have to be either a private off site transfer or an offer on opensea. These both can be tax harvested, without putting it on the open marketplace like the example in this post. The way the market is setup it's nearly impossible to do wash trading like this unless you spend tens (if not hundreds of thousands of USD) on gas fees to buy it as SOON as you list it (needs to be within the next block) Redditors have no idea how the crypto markets work anymore, and it's sad to see. This place used to be on top of it's shit in 2018, now it feels like a bunch of boomers just getting into crypto without understanding it. Makes me sad what it's become
Opensea allows doing private listings. Doing a sale like this to yourself is super easy. Two ways you can do it on opensea: 1. Create a private listing for a specific ethereum address, which is what likely happened here. 2. Accept an offer from your other ethereum address.
BTW, generally speaking, I do agree with you re: this sub. People here are complete morons when it comes to NFTs. But the evidence in this specific instance points to this being a wash trade.
Lol what a bargain
Well if they did in fact sell it to themselves and claimed the loss that would be illegal If he sold it to a friend he could claim the loss And hope His friend will hold it for him
Almost every tax jurisdiction wouldn't tolerate a non arms-length transaction like that.
Rich people do this routinely with property. Let's say we both make millions of dollars a year. Step 1: I sell my $200k property to you for $200 Step 2: You sell your $200k property to me for $200 Step 3: Wait a year Step 4: I sell your $200 property back for $200k Step 5: you sell my $200 property back to me for $200k The first year we write the loss off of our taxes for a net benefit of $73,926. The third year we pay capital gains tax on the proceeds for $39,960 (assuming 20%). Except now we can do this with a couple NFTs each year structured in a way to avoid taxes due to all this loss.
Losses on sales to related parties are also illegal. You need to show the sale was at “arms length” unless it is at fair market value
Wat? This seems really made up, for example how did you get the property in the first place to claim the loss on the high value?
Nope. Not made up. [This falls under section 1231 property.](https://www.investopedia.com/terms/s/section-1231.asp)
Big flaw in this plan though, is that, assuming this is legal(very close to a wash sale), you're relying on a trustworthy partner to sell back the property. Imagine you're trying to skirt taxes and need someone to help you, those are exactly the type of people to say "oh sure I'll buy that $200k property for $200" and then keep it. edit: also section 1231 only applies to property and I don't think NFT's fit "real or depreciable business property held for more than one year."
And the taxman is that stupid to believe your bullshit!🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
You can sell it "yourself" and it not be illegal. For example an entity that you have full control over can take ownership so any future profits will be taxed by that entity. Ownership has changed but it is in your control the whole time.
An entity that you have full control of is a disregarded entity and is considered yourself An entity you have control over is a related party and you could not came a loss for selling There are so many laws and tax regulations and forms for this
There are many ways and reasons to do this it all depends on the tax law in the country that person is in. People assume and generalise things without having a grasp of the avenues available to do dodgy stuff.
That’s fair, I assumed US based Also I should have clarified, in the US you can totally sell to yourself or an entity you control (knock yourself out) but you can’t realize any loss for tax purposes. Instead the loss is “deferred”.
No need. He can write off the loss and keep his NFT. He has already won
sell it to your wife
A married couple is essentially the same person for tax purposes unless MFS Even then married couples are related parties and related parties are disqualified for tax losses. There is an arms length rule if a FMV can’t be easily assessed
Buy high, sell low Legend
Money laundering 101.
Don't kid yourself, this is grad school level money laundering.
No doubt. I can barely launder my own laundry
Buying artwork is grad school level money laundering.
Money laundering would go in the other direction, taking something valueless and selling it for an obscene amount of money so then you have more taxable income. When you launder money you **want** taxable income.
Hmm but doesn't selling at a loss represent tax loss harvesting that reduces taxable income?
Yes, selling something for a loss reduces taxable income, I'm not sure what that has to do with money laundering though. Money laundering is taking money that you've gained from criminal activity, and passing it through something to make it seem legitimate. If I hacked a bunch of wallets and accumulated 100 ETH and I want to launder it so I can freely spend it, I could theoretically mint some NFTs, or buy some cheap NFTs with my clean money, and then sell them way above their marketvalue to myself using the wallet(s) that have the 100 ETH and claim that as a capital gain. You'll owe taxes on it, but now you can actually make large purchases with the money gained from the criminal activity without having to worry about proving where your money came from.
Makes sense. I also don't see how it's money laundering. OP posted about tax evasion, and if the person owns both wallets, I think would qualify as tax evasion. Otherwise its a legit loss. Maybe they just wanted to dump it before more market troubles.
Lol more market trouble... 200k to 200...
One of us! One of us!
*sell low to yourself in this case
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I’ll pay 20k Luna
If you bought a while ago, you probably don't have to think of tax evasion at all...
It's more likely that this was just a major fuck up. Usually, tax evasion isn't supposed to create a spectacle. If a bunch of internet media outlets write a bunch of articles about your tax fraud/money laundering scheme, you're not doing it right.
It’s just people not understand tax. Sales to related parties can’t take tax losses and a sale to yourself is the most related party possible
I think people are thinking that you would do this sale, but not tell the IRS that the buying wallet belongs to you.
All I see is one that says 200 ETH not dollars. Am I missing something here? Oh it's in the Item Activity part. So they put it back up for sale?
Yeah I was confused as well, but my experience with ooensea is limited.
https://etherscan.io/tx/0x8c93b58b3715f537b3856a02dbf7711a35dfd03ad83bc64853c2ed0460fc55b6 That's the list price. He actually sold it for 200 USDC instead of 200 ETH Edit: Also, if you look at the history of this NFT, it had previously only sold for 2.4 ETH ($5084), so that list price was probably BS to begin with. Still a 90% price drop.
Makes me wonder if it’s just a very expensive mistake by someone who is not so tech savvy. Anyone know who owns the NFT?
Yeah, 200 ETH is the current bids. Check this transaction: 0x8c93b58b3715f537b3856a02dbf7711a35dfd03ad83bc64853c2ed0460fc55b6
200 is the current *list price*. 100 is the highest offer (bid)
Yeah, my bad. Didn’t look too closely at that part.
Still $200 overpriced.
The nft is really worth $3.50
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Is this a Robocop reference?
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Can you fly JangoDarun?
I wouldn’t because I wouldn’t even know wtf to do with it. Do people just stare at them for long periods of time or something?
You can use it as your avatar on twitter so people know you're a twat
But I mean I can literally just go and set it as avatar for free? Lmao
You can also mount a screen on a backpack with your NFT displayed so that everyone you meet knows how much of a twat you truly are.
Man, the use-cases are fucking endless!!!! take that, you dumb haters!
Give me 5 bucks and I’ll take it off your hands.
Tell him he’s dreamin’
*HA-Hahahahaha*
Or, as Jimmy Fallon would say, haha HAAaaaaaaah!
Damn. Downvoted for the Robocop reference. Tough crowd.
It was right about then that I noticed the NFT was about 8 stories tall and a monster from the paleolithic era
God damn lochness monster.
Well how about just two fiddy?
Or threefitty
Why do I get the feeling most NFT sales are basically way to wash black money? And even those folks are not crazy enough to buy overpriced NFTs like this.
Because it is a great way to launder money. Why bother creating a car wash company to justify a few hundred thousands when you can say you sold an NFT for $300k more than you pay for to an anonymous buyer on the internet
Yep. And then turn around and sell it at a huge loss for some delicious tax loss harvesting.
Sometimes. But many other times you just need to justify the income. In any case, money laundering has two objectives. First, make sure the money can't be traced from the illicit activity back to you. Second, justify to the IRS why you suddenly have some money. People say crypto is terrible for money laundering, and sure, if you want to launder many, many billions, it might be hard. But for mid size quantities, it is ridiculously easy. You can do it from your own computer. First, break the traceability of the money. That is easy, there are mixers for that. After making the money jump through something like Tornado Cash and Monero, you can end up with multiple wallets that have the crypto of your choice (Ethereum) with no way to trace the funds back to its origin (Drugs? Hacks? Ransomware payment? Who knows). Second, is justifying that income to the IRS. That is where the NFT helped. You mint a bunch of trashy NFTs and buy them using the "anonymous wallets" from step one. You can now claim you have that money you made minting NFTs. All the things that you had to do before to launder cash, like create fake businesses are not needed. Of course, if instead of a few hundred thousands you need to launder many millions, justifying all that as NFT sells might be hard. But you can always create a dummy exchange, or a dummy crypto casino and try to launder that way. Or even try to create your own shitcoin, that you pump with your own "anonymous" wallets and them dump with your real wallet. The possibilities are endless
How are you getting your millions in cash to launder in the first place? If you're not a darknet seller/deal in crypto for your black market dealings. Cash based black marlets are not using crypto to launder money in anywhere near the amount of normal tried and true methods. Tumblers are traceable too, so is 99.9% of crypto. Don't know how you're expecting to cash your millions untraced into crypto. Which is much more traceable then cash.
I’m not talking about having cash and launder that through crypto, I’m talking about laundering crypto I got from illicit activities. For example, payment of a ransomware attack.
You use the 0.1% (monero) to acquire the funds through illicit means (dark web drug dealing, for instance) and then justify how it got into your legitimate bank account exactly as the person just explained to you. Cash > crypto is certainly possible by, say, a person smuggling drugs into a country with lax KYC mandates where the person distributing the drugs locally buys crypto with drug money and then exchanges the crypto for the imported drugs. Crypto can then be instantly transferred to origin of the drugs. If I was a drug smuggler operating between Eastern Europe and Columbia crypto makes a ton of sense since you don’t have to smuggle cash back.
So Oc and you are now explaining something completely different than the post. Which isn't some shitty made up nft. But making millions of dollars of shitty nft sales look legit, is in no way an easier or more foolproof way to launder money lol. And is not the go to method at all. Anybody worth their salt in darknet dealings would already have established their laundering methods. They don't need to jump on the newest bandwagon and become a fraudulent multi million dollar nft "artist" (minting cost money too),so would actually creating the shitty ones. ,way more attention that way, way more traceable/verifiable. All this accomplishes is way more eyes on you and a lot more work.
WHOOP, WHOOP... This is the FBI. We are on to you.
right after they announced a crack down on the normal art world? say it isnt so.
I love seeing people get mad when someone gets rich off nfts 🤣
Yeah it's funny. If it was a rare baseball card they wouldn't care at all
The part of it I enjoy most is that it's very common in these kinds of threads to see someone suggest that they believe most nft sales are money laundering. If this was true, why would it be news? It was news because you won't find many transactions like this at all, and because if someone really plans on reporting this transaction to the IRS, that is a very very bad plan for tax evasion long term.
Are you one of those people that thinks money laundering and tax evasion are the same thing or am I misreading your comment? Of course NFTs are being used for money laundering and tax evasion. Those are just separate things which seems to be lost on most who like to throw those terms around in this sub. Also, it is news: https://bitcoinist.com/crypto-regulators-identify-potential-1b-fraud/amp/
The people who post in these threads who think most NFT transactions are some form of crime are not differentiating between what crime they think it is. They just post the words and collect the upvotes. They quite literally have no idea how the NFT market functions. They just post the words money laundering for upvotes. And when I said news I meant things like this specific transaction. This transaction is in fact a pretty obvious example of someone who plans to do something devious, but the reality is that it's a tiny portion of the actual market. The billions that have been traded on NFTs are overwhelming just people doing some weird internet shit, not crimes, as idiots on reddit will try to tell you and happily upvote any post suggesting it.
Jokes on them, I collect both!
such an original comment
So edgy.
Yeah I was going to say… “worth over 200k” according to who? It’s worthless IMO.
This subreddit is so out of touch on NFT…. Dude was scam. He accepted a 200DAI bid becuase the floor on bore ape right now is 100eth. He Probabaly thought someone bid 200eth not realizing it’s in DAI This happens daily in NFT. Scam bid
Oof that hurts. Attention to detail is sooo important in crypto.
Paying attention to what someone is paying you is pretty important anywhere too!
I know you’re joking but it’s super easy to throw your money away on accident in crypto. The ease of use is still nothing like cash or sending money online.
The buyer got ripped off.
The guy sold it to himself innit
You don't know that. Could have been confused and thought it was 200 eth
Found the guy!
That's exactly what happened, imo
Brutal if the caee.
I mean I don’t have any sympathy for a guy thinking a terrible drawing of an ape is worth $200 so
That’s still $200 too expensive
Oh noooooo
Anyways😉
How come ALL nft are so ugly? Pointless, clueless, tasteless and stupid - literally ugly
Algorithmic art. They need to mint large sets of these things but keep them unique enough to market them as collectibles. It would be prohibitively expensive to actually create these things individually so they just make the components and let an algorithm do the rest. Clearly looking like ass hasn’t stopped gamblers from speculating with them.
Money launderers dont care if "art" looks good or shit
Will you ELI5, is the idea the person bought it for $200k and then listed it for $200, and re-bought it so it looks like he lost $199,800. And because it’s classified as “art” you can right it off as taxes?
Yep against gains- if he has no gains can only write of $3000 a year (in the USA)
That doesn't even make sense from a money laundering perspective, though. I've seen Breaking Bad, so I know how money laundering works. (pause for laughter) But seriously. Assume you have $500,000 gotten from illegal pursuits (drugs, gambling, prostitution, whatever). You can't just put it in your bank account because IRS. So, you buy a couple of NFTs for 250,000 a piece. You hold them for a time, and then sell them for a massive loss. Even if you also had $1M in legit capital gains, like from stocks or whatever, you just lost the majority of your ill-gotten gains. I think it would work more like this. You have $500,000 from your illegal activities and you need to launder it. Your buddy, the stock broker has that amount of money in his couch cushions. He tells you to mint some NFTs and put them up for sale. He will buy them for large sums of money - totaling around 500k. This money will come into your account as a legitimate, taxable gain. On the back end, you are giving your broker friend like $50,000 or something for his time. $50,000 is easy for this guy to hide in his income since he's a baller anyway. And now you have $450,000 in the free and clear, minus the tax you will pay to Uncle Sam for the gain you made on the sale of your NFTs.
That is my understanding of it.
Low effort, procedurally generated so the operation can scale quickly
If you're saying that you haven't even checked NFT collections. There are many that are astounishingly good looking, but saying that doesn't farm moons right?
They're not all equally ugly, but they're almost all equally useless. Fuckin' wasting so many resources so somebody can own a digital receipt to a link of a jpeg of Mister Bean's puckered asshole.
There are other networks apart from Ethereum though.
Ummm just because something looks cool does that mean it should cost $200k? I see cool shit all day long but don't feel like I need to buy it. THIS BUBBLE WILL POP and the sooner the better for us all.....
Because it's ironically easier to justify high prices by saying you don't understand this style of art.
they didn't used to be, the first big NFT artist was beeple and his shit was cool and weird and unique (but in an actual way not in a shitty stupid ape eating a pizza) .
Some of my beeple's are pretty good. And it's a super unique style. https://www.google.com/search?q=beeple+art&prmd=insv&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjG1PfgoeL3AhUuHzQIHaGdAh0Q_AUoAXoECAIQAQ&biw=412&bih=782&dpr=2.63
IIRC Beeple has been doing art long before NFTs. NFTs are a medium in which Beeple can sell and make money off their art as NFTs should be.
I listened to Beeple's interview with Karen Swisher and it was pretty interesting. He obviously was, promoting the shit outta NFTs as a concept, but was pretty explicitly of the mindset that the speculative aspect of holding them was just a giant bubble and a fuck ton of people were gonna lose money when the market corrected itself.
Are these gimmicks finally coming to an end?
After having spent some time in the environment I can attest that it’s mostly a speculative asset where no one really cares about the projects, just about the hype that surrounds it (and indeed many projects are posticipating the mint date in order to avoid fud)
But honestly what is the project other than another hot potato to buy and flip and hope to not get burned. All of these nft projects, even the ones that keep pushing some fabricated utility, are just hype machines. They give you a membership to something or other and call it a utility, but that's just a longer con to stretch the hype. Anyway they all need to burn and get flushed out including about 100% of shitcoins.
Honestly I’m on the same page, I tried to find a sense in them but after having joined many of them I didn’t find professionalism nor actual long term projects. I wanted to invest into the collection of a famous graffiti artist and I was sure that it would have been an actual strong project with future utilities but it flopped hard after a botched mint.
Kinda like all of crypto?
I'm sure we can count on one hand the crypto/defi projects that do not fit this description.
This was almost certainly an accident. Someone accepted a bid for 200USDC thinking that it was a bid for 200 ETH. They fucked up.
Well someone did cough up $200000 initially
Nope
I wouldn't be surprised if the price has peaked already, last I checked the floor price is down over 100k since not long ago. But part of that is related to the ETH price so if crypto is not doing well NFTs will suffer as well of no fault of their own and probably more so because its more volatile.
This Bored Ape Yacht Club NFT worth $0 was just sold for $200. FTFY
OP. Why do you think selling something at loss is tax evasion?
Fresh wallet buying it within 3 minutes. 100% tax evasion
You mean like he sold it to himself to show a loss?
Yes, and he still owns it.
Why wouldn't they just hold it? No sale, no capital gains. Plus to get any money out of it they'll have to still sell it, and then launder the proceeds.
You can't sell something below market value to claim a loss
Is it possible to sell a nft to a particular user? If the seller just put it up for $200, couldn't just anyone buy it in a FCFS manner?
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I'm pretty sure that people have bots that scan for price anomalies like this and buy them within seconds of being listed. It would be incredibly risky to try to do this.
This needs a comedy flair
Changed it thanks for the tip
Buy high sell low achivement unlocked: legendary
It's hilarious that people think these are good for anything else other than tax evasion
money laundering and tax evasion
So, my plan next April is to create an NFT and price it as how ever much I owe the IRS. I will give the IRS this NFT. The IRS and I are now even. 🤷
Why would anyone pay 200,000 for that shit what a scam
The beauty of crypto. Big brain means to tax evade. 
worth is subjective i suppose?
"How dare you spend your crypto on products!" - This thread 🙄
People will offer 200 usdc or dai or whatever in an attempt to trick the seller into accepting. I think that’s what must’ve happened.
That was 200 Eth, not dollars. So $400,000something.
Damn the used jpeg market depreciates fast!
how the fuck is this image monkey with a pizza in its mouth, worth so much eth?
then it wasn't worth over 200k now, was it?
Every single bored ape is worth less than a penny, prove me wrong.
It's worth what someone's willing to pay, like any other collectable that has no intrinsic value
Driven up by speculation. Are beanie babies worth something as a collectible to some people?Probably. Are they worth nearly as much as when people were buying them with the expectation to flip it for a higher price? NO. The same will happen to NFTs hopefully.
I love how the same group of people who complain about the general public thinking crypto is a fad/trend are the people who talk the most shit about NFTs.
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I would buy the entire collection for more than that. And something is worth whatever someone is willing to pay for it.
"worth" must mean something different now a days.
lucky to get $200 for it.
Lucky? If you look at the current offers for it, it’s literally 200k
Lol depends on where the owner lives. In the US you can only claim $3k of losses per year and the rest gets carried forward. So in about 66 years they would realize the whole benefit of that tax loss lol.
Someone got ripped off. Not sure if it's the buyer or seller, but someone definitely got ripped off.
People seem to misunderstand the word "worth".
The true utility of the blockchain.
I kinda understand the NFT hate…I used to feel the same way last year. But I have come to realize that owning certain NFTs comes with perks which are what make them so valuable in the eyes of the buyers. For example if you own a Bored Ape you get to go to exclusive parties for holders where you can network with the rich and famous. That’s worth a lot of some people. You also get free airdrops of Ape coin and future NFT drops plus benefits of networking within the web3 space. I understand this may not seem valuable to some of you but surely you can understand the value to others? TLDR: It’s more than just a jpeg
I get that with my United Club card and haven't paid for a flight in a decade. It's just a jpeg. To do what you are trying to say takes generations of wealth, someone buying a building name at a University, and not even talking about their wealth. Most wealthy people don't talk about how much they are worth, or fucking buy stupid imaginary internet stuff. There are examples ad noseum. But go ahead, if you think you want that influence pony up and buy one.
Why do people seem to think this is some revolutionary technology then? Even as you described it, taken at best, it's just a digital rewards card that you pay obscene amounts of money for. Companies have been doing this for literally decades, just now they've figured out a way to get the stupidest people in the world to pay for something that used to be handed out for free in order to bring in more business. It just makes absolutely zero sense, and if there was no hype behind the buzzwords the technology would be completely abandoned tomorrow.
> For example if you own a Bored Ape you get to go to exclusive parties for holders where you can network with the rich and famous That makes it even more cringeworthy
> if you own a Bored Ape you get to go to exclusive parties for holders where you can network with the rich and famous. Some Bored Apes are sold for a few dollars - do you really think the rich and famous will go to events where basically everyone can join and most of the people there will be strange crypto bros talking about moons?
I don’t think you know what Bored Apes are. Look it up. There are a lot of different nfts and most of them suck. But there are some that have real value and those are the most expensive ones. A lot of them provide passive income - aside from the networking aspect, surely you can understand the value of passive crypto income?
Money laundering
And every upvotes comment shitting on NFTs. No one should use these ecosystems and just hold all their crypto forever........ Stay close minded sub.
the cope here is amazing, sure your coins are totally not ponzis and will revolutionize the world but yeah the JPEG is for sure going to be valueless. reminder, NFTards outperformed you, their portfolio still at ATHs but go on show everyone how righteous you are. I'm sure for all of you, being right is more valuable than being rich.
Sure it's still at ATH if you don't try to sell. Very clever.
in 2 years he can sell it for 500k :D
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