qbteachmt
Level 15

"It has to be reported, as they have a lot of virtual currency involvement in this "business" and many have earned commission in thousands...."

You asked about Sched C. You don't report on taxes when you take money from personal checking to start the business checking account. There is no Expense and nothing Depreciates.

You also describe "active" income, Active recruiting, and now, earning commission with no recruiting. Reporting the commission and reporting under the virtual currency rules are different than the Business part of this question. Your question has many parts to it.

I see this as: Your client invested in a currency conversion scheme as a gifting pyramid. I can see reporting the income, and later, the gain or loss. Running it as a business and calling it active would be a bit of stretch. Even Forsage referred to it as Passive Income according to your comments here. Are you sure the "commissions" are not simply an accrual into the virtual currency wallet, more like currency trading? Sched D vs C.

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