Lecture Notes: Celsius Creditors Distribution and Tax Implications

Introduction

• Announcement of the second distribution for Celsius creditors.
• Discussion on how it affects taxes, involving insights from Laura of Crypto Tax Girl.
• Introduction to Aaron's Patreon for crypto insights.

Celsius Distribution Details

Announcement Highlights

• Celsius’s second distribution of $127 million from the litigation recovery account.
• Classes 2578 and 9 eligible for distribution.
• Distribution will be in Bitcoin or USD, no Ethereum.

Security Warning

• Increase in phishing attempts.
• Reminder to verify communication authenticity.
• Second distribution will use the same method as the first.

Eligibility and Distribution

• Not for convenience class claims (under $5,000).
• Payment: Cash or Bitcoin, same method as the first distribution.
• Cumulative distribution to be approximately 60.4% of claim value.
• Instructions for those with distribution issues (e.g., change in payment method).

Tax Implications

• Bitcoin price for distribution set at $95,323 per Bitcoin.
• Clarification needed for tax reporting.

Financial Strategy and Reserves

• $127 million distributed, $247 million held in reserve.
• Reserve used for ongoing litigation efforts (e.g., FTX, Tether).
• Anticipation for future distributions once litigation is resolved.

Tax Considerations with Laura

Past Losses and Current Implications

• Discussion on Ponzi vs. Capital loss.
• Ponzi loss deadline passed; capital losses can be taken across multiple years.

Current and Future Tax Reporting

• Reporting Celsius losses starting in tax year 2024.
• Calculations and implications for different scenarios:
  • High cost basis vs. low cost basis.
  • Stablecoin holdings impact.

Second Distribution Tax Calculation

• Scenario examples provided for different asset holdings.
• Insights on what constitutes taxable events (e.g., forced sales for shares).

Working with Crypto Tax Girl

• Insights on preparing taxes and calculating losses.
• How to contact and work with Laura for tax preparation.

Aaron's Patreon and Community Engagement

• Link to join Aaron’s Patreon for crypto insights and community.
• Focus on market predictions for 2025 post-Bitcoin halving.

Conclusion

• Final remarks about staying informed on tax implications and security measures.
• Encouragement to engage with community resources for better financial decision-making.