3 ms·

"You have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now w

"You have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets." (via Michael Lewis)

TeMPOraL 4y ago
Obviously you can't create new money this way (not without involving an external substrate for scam, such as crypto tokens), but I think if you tried hard enough, you could create for yourself a tax liability on those billion dollars.
- vlovich123 4y ago
  Huh? Replace dog and cat with “Art piece I had an appraiser that I hired claim it was worth this”. Happens all the time. Monetary value is totally arbitrary. If not, tulips in holland wouldn’t have been valuable enough to buy a house at one point and then moments later been totally worthless.
- singron 4y ago
  You would owe capital gains tax if these were considered like breeding livestock. You would probably want to sell the pets again so you could offset your gain with loss. Otherwise, I think this sale would be considered ordinary income (other than the fact that it's for an outrageous amount). If you did this as a person, you would have an enormous tax bill and no cash to pay it. As a business, you could deduct your expenses and end up with 0 taxable income, although the IRS probably wouldn't like it.
cutemonster 4y ago
This sounds pretty close? > online grocery-delivery company Boxed Inc. received $20 million and signed a five-year, $20 million contract. Days after receiving Palantir’s money, Boxed paid $15 million to Palantir as part of the contract
sofixa 4y ago
Funnily this happens in football too, most recently Juventus (a fairly old and famous Italian club) are being investigated for financial fraud including around one such deal with Barcelona (which did a number of them), where two players were swapped for overinflated values, on different days to fall in different fiscal quarters.

TeMPOraL 4y ago

Obviously you can't create new money this way (not without involving an external substrate for scam, such as crypto tokens), but I think if you tried hard enough, you could create for yourself a tax liability on those billion dollars.

vlovich123 4y ago
Huh? Replace dog and cat with “Art piece I had an appraiser that I hired claim it was worth this”. Happens all the time. Monetary value is totally arbitrary. If not, tulips in holland wouldn’t have been valuable enough to buy a house at one point and then moments later been totally worthless.
singron 4y ago
You would owe capital gains tax if these were considered like breeding livestock. You would probably want to sell the pets again so you could offset your gain with loss. Otherwise, I think this sale would be considered ordinary income (other than the fact that it's for an outrageous amount). If you did this as a person, you would have an enormous tax bill and no cash to pay it. As a business, you could deduct your expenses and end up with 0 taxable income, although the IRS probably wouldn't like it.

cutemonster 4y ago

This sounds pretty close? > online grocery-delivery company Boxed Inc. received $20 million and signed a five-year, $20 million contract. Days after receiving Palantir’s money, Boxed paid $15 million to Palantir as part of the contract

sofixa 4y ago

Funnily this happens in football too, most recently Juventus (a fairly old and famous Italian club) are being investigated for financial fraud including around one such deal with Barcelona (which did a number of them), where two players were swapped for overinflated values, on different days to fall in different fiscal quarters.