Will mqp have to pay taxes on his mana income?
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Ṁ7669
Aug 10
15%
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mqp can buy YES shares in this market so he has something to hand in as taxes if necessary. Everyone who's convinced this is not a thing can buy NO. I rake in fees. Nice. Close date subject to change. Close date updated to 2022-04-30 11:59 pm Close date updated to 2022-05-01 12:45 am Apr 30, 11:12pm: If mqp pays taxes and has to, this resolves YES. If mqp doesn't pay taxes because he can donate all his mana instead, this resolves NO. If someone produces a tax accountant's statement that he'll have to even if he donates all his mana, this resolves YES. If someone produces a tax accountant's statement that M$ is not a "convertible" currency, this resolves NO. Close date updated to 2022-05-01 1:10 am Close date updated to 2022-05-01 1:40 am Close date updated to 2022-05-03 7:19 pm Close date updated to 2022-05-03 8:00 pm Close date updated to 2022-05-06 10:20 pm Close date updated to 2022-08-10 10:20 pm
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My current position is that this should probably resolve N/A at some point if the creator does not return / reply. There are a bunch of criteria laid out for both Yes and for No; none of those events have happened, and the due date has passed. Further extensions of the close date would also make sense given the history of that, but I don't really see a benefit to extending indefinitely.

I don't think the arguments I've seen / made are clear enough or well-sourced enough for me to want to mod resolve at this time.

I don't understand what the argument is for No here. My understanding for Yes:

  • It's income.

  • Sure, it gets donated or could, which could be deducted.

  • But that has to be included in the statement and competes against other deductions

  • Which amounts to having to pay taxes on the income, but getting to deduct the donations, which is normal.

  • Except that I think for normal users mana donations aren't deductible because of the Manifold corporate structure.

No side is just... it's not literally money, or a convertible currency? Plenty of other non-monetary compensation is taxable, just as non-monetary donations can be deductible. Is there more to the argument than that?

@EvanDaniel I think the argument for NO is that Manifold for Good (the 501c3 entity) donates at the direction of user. Which sounds very much like a Donor Advised Fund (DAF) to me. Any gains made inside the DAF are not your income, they are the charitable entity's income, and they aren't reported or taxed as your income. I think Manifold works the same.

(Users choose donations, but it's just a suggestion, users do not actually have control - the 501c3 has no obligation to donate as they say, and in fact Manifold has changed the rules, supporting this claim.)

This argument seems pretty clear to me for gains people make by trading on Manifold. The situation with mana paid to an employee is not clear to me in either direction.

@jack I think it is like a DAF in that fashion, but not actually a DAF. In particular, if it was actually a DAF then I would expect my donations into the DAF to be tax deductible. But I think you're right about the logic for gains inside Manifold not being taxable or reportable since they aren't my income.

Compensation given for labor in the form of donations to a charitable organization aren't normally reportable or taxable, right? Like if my employer has a donation matching program or something, the match isn't something I have to worry about on my taxes, I just report my normal income and deduct my donation. So if the Mana was functionally a donation to a 501c3 then it wouldn't be reportable, but normal Mana purchases are not that.

@EvanDaniel the donations into manifold for good (which are largely grants from EA orgs) are tax deductible! It's a 501c3. But when you buy mana that goes into manifold the for profit entity. So that is not deductible.

When manifold gives employees mana, that could be viewed as manifold for good (the 501c3) giving the employees something like a regranting budget of sorts. It doesn't come out of manifold the for profit. But then this story gets more complicated if you can redeem mana for other things besides charity.

@jack Yeah, that sounds complicated.

Perhaps someone should ask a tax accountant ;)

@Gurkenglas Did you reach a conclusion? Should this resolve?

I can withdraw liquidity!! Nice. Probably it says that I bought 183 NO 18 minutes ago because that's how many NO shares I had more than YES shares as liquidity on the table. Market open once more.
@mqp have you paid ur taxes yet or did u get ur taxes extended like me
predicts YES
@Sinclair This is for next year's taxes, not this year's. I am definitely reporting and paying my mana income unless someone else turns up with legal advice that I trust saying I don't have to. I am essentially confident it's required by law. I have no idea what Gurkenglas thinks he is doing with this market.
predicts NO
My understanding of this market: mqp was confident that the correct probability was like 90% and I was confident it was like 10%. I.e., mqp is pretty much sure he needs to pay taxes on his mana balance and I'm pretty much sure he doesn't. Exciting disagreement! So the two of us started playing tug-o-war with the market probability, which was tedious because the liquidity was so low. I'd put in however many cents to move the probability to 90% and mqp would do the same to move it back to 10%. Rinse, repeat. So Gurkenglas stepped in and added a bunch of liquidity. This let mqp and I each dump in thousands of mana, which was great. Now we have a real wager on the outcome! And it's lucrative for Gurkenglas in expectation. If the market resolved to some intermediate probability then Gurkenglas would make a lot of money from both me and mqp. If Gurkenglas could withdraw their liquidity now, that's like cashing out at that intermediate probability which is optimal for them. If they wait till the answer is known then they make less money (lose money?). Unless they prevent anyone from trading by keeping the market closed. I don't think that's in the Manifold spirit but Gurkenglas and I agree (and I think the founders do too) that Manifold should allow withdrawing liquidity, which would make this moot.
.....
I heard you're gonna ask an accountant; I expect to resolve as he answers.
To clarify, my position in this market was based on whether M$ specifically paid to me as part of a contract for me to do programming labor is taxable, not whether random market payouts are taxable. I don't know how Gurkenglas will resolve it, but that's what I was thinking when I bet.