What You Don’t Know About Crypto Taxes Can Hurt You

Bitcoin hokey Pokey

Crypto taxes are something to worry about if you are a trader of cryptocurrency. The taxes are
calculated maintaining several parameters like the number of coins and trades and exchanges
that you have made. This process consumes a lot of time and there are many things that need
to be known about the crypto taxes.

Cryptocurrency tax software is something that helps you to effectively calculate the amount of
the taxes in case of being a trader for the cryptocurrency. Here, you will know about some facts
about the crypto taxes which you might have overlooked all these days. As an investor of the
crypto, you should always stay in good connection with the tax advisor. He might be helpful to
guide you through the process of calculating the tax and help you to avoid various
abnormalities regarding tax payments.

The cryptocurrency tax laws

There is a cryptocurrency law which has seen no change since 2014. As a trader, it is your job to
know about all the laws and the scopes. In the real scenario, you will face a lot of confusion
about the taxes on the cryptocurrency on not knowing the taxation laws. You should always
remember that it is vital to understand the implications of the tax gains in a given year.

Some mostly Known facts about the tax session

Everyone is knowledgeable about the ‘realized’ taxable losses and gains when they are the
cryptocurrency.

On buying 2 bitcoins for approximately $4000 in August and selling one in the month of
December for $14000 gives you a realized gain of $10000. You will be able to have a realized
gain easily. The gain is denoted as a normal income and taxed accordingly as you have held it
for less than a year.

The withdrawal of the funds is not needed in case of the gains to become taxable. You can owe
the gain as the sales easily proceed over to the USD wallet that is coin base.

You must always remember that the exchange process of one coin with another is an event that
demands taxes. On selling one bitcoin of $4000 approx for 20 litecoins having $400 coin basis
you can have a total realized gain of $4000 but it might seem that you have sold the bitcoin
worth $8000 in USD.

According to the experts, it is easier to report and track the normal traditional gains of
investment but in the case of cryptocurrency it can be confusing. This is because the trading
between one and another coin the losses and gains are needed to the reported in details.

You can use the crypto tax calculator that is provided by the set of the leading software for the
reporting of the taxes. Importing the trading data will be easier with the help of tax software.

Facts about crypto taxes that some people know

In the case of cryptocurrency you must know that selling and spending the crypto is just the
same. All the donations of the cryptocurrency are deductible. You get the opportunity to
deduct the major sum upon the market value avoiding the payment of the tax for the gain that
you have made. In case of dealing with the Bitcoin and Crypto taxes, this is a vital thing that you must
know.

Facts that very few people know

As the IRS has no prescribed guidance for the calculation of the cost basis for the losses and gains on the cryptocurrency Due to this reason, the cryptocurrency is treated the same as security. The Last In, First Out method and the Average Cost method are to conventional ways to calculate the accounting of crypto. On choosing the FIFO (First In, First Out) you might experience an increased tax bill. According to legitimate sources, the same happens with the people who sold or bought the crypto in a given year.

Internal Revenue Service

On choosing the Average Cost or the LIMO method the chances of the under-reporting of the
tax liability in a given year might happen. You can face this situation. You must, however,
choose the FIFO because the IRS might need the records for it in the future. A crypto trader
should always know these jargons.

Important Facts that everyone should know

There are certain things that you have to keep in mind while knowing the aspect of crypto
taxes. They are.
● The tax audits for cryptocurrency always has coverage of three years
● The rules from the IRS can come in retroactive action
● New IRS guidance can be put into action in a certain point of time
● Try making decisions that are right as wrong decisions can hurt you in the future.
● You should not be a subject of under-reporting of the taxes. Criminal charges can be
imposed on you while doing that.
● You must always try to have a clear note on all the transaction and taxes you have
made with the cryptocurrency.
● Take the help of a professional and the digital support of a cryptocurrency trading
software wherever useful.

So, you should go through all these facts in case of dealing with taxation on the cryptocurrency.
You should maintain proper decorum while dealing with the digital currencies because any
outlaw can lead you to drastic legal proceedings. Even if you are a trader or an investor, always
try to connect with the tax professionals. The tax experts suggest you the right way to avoid any
nuisance.…

Continue Reading

SEC Doesn’t Regard Bitcoin and Ether as Securities

The Securities and Exchange Commission of US has disregarded ethereum as a platform for investment. Director of the division of corporate finance, William Hinman, said on Thursday that ethereum’s token, ether, cannot be supervised in the same way as stocks and bonds.

Earlier in April, Jay Clayton, SEC Chair, acknowledged bitcoin with the same sentiments. Both the statements can be considered to understand the outlook of America’s premier regulatory authority over digital currencies.

The recent remarks suggest that a digital coin can no longer be regarded as a security after it becomes significantly decentralized. On the contrary, most of the smaller tokens and Initial Coin Offerings are included into the bracket of investment vehicles. The distinction is important as securities have to be regulated like normal stocks.

Hinman said, “Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers and sales of ether are not securities transactions. And, as with bitcoin, applying the disclosure regime of the federal securities laws to current transactions in ether would seem to add little value.”

On the other hand, co-founder of Ethereum and founder of CosenSys, Joe Lubin was thankful for SEC’s decision. He was particularly pleased by the clarity provided by the authority. The co-founder affirmed that his digital coin would continue to transform the web through networks that are secure, fair and uniformly distributed.

As of now, there are hundreds of developers that use ethereum network for developing applications. The director of research at Coin Center, Peter Van Valkenburgh, said that software development and the network has sufficiently, and there is no third party upon which it has to relay.

The differentiation matters for the industry, as investors are able to distinguish digital coins from a common stock of a company, in which a person is providing funds based on a company’s capability of developing products and earn a profit.

But, it should be noted that there is confusion in regards to the initial investments made in the network being securities, as back then, ethereum was not completely decentralized. Hinman did not have any comments on the topic which hints that original investors who made the most profits might face regulations someday.

Other virtual coins have not been quite lucky as SEC has made them a subject to regulation as they normally raise funds to boost a start-up and its application. One should know that trading ether is not regulated but buying and selling tokens build using the ethereum network will be facing government control. ‘

Back in February, the SEC proposed the Senate’s Committee of researching digital currencies with the help of Congress and other federal and state colleagues. It was aimed to diagnose crypto exchanges and trading websites for taming the wild crypto space.

After, clarification over ether’s individuality it is hoped that many more investors will jump over the network to avoid paying taxes to the government. Similarly, investors would like to trade bitcoin as it has the highest chances of profits with the lowest government control.…

Continue Reading

Why Could Blockchain Be Useful in Tapping Kenya’s Informal Economy?

Blockchain technology is living up to the expectations of being a disruptive one of the decade. The technology is opening up an informal economy for the financial sectors in Kenya. The size of the informal sector cannot be ignored so easily though it might face some teething issues. Also, the effectiveness of the technology in the country could allow it to be explored in other parts of the world too.

Credit Worthiness

Small businesses like fresh vegetable stall have so far not been able to get the attention of the banks for loans. In fact, banks in Kenya could not resolve the issue of the creditworthiness of traders though the market size of the informal economy is pegged at around $20 billion in the country. The new age technology is being deployed to address the issues concerning the small traders if the banks could find a way to get their creditworthiness.

For instance, a 40-year-old woman is one among several small-scale retailers who could make use of her smartphone to gain access to loans. That would enable her to buy groceries like onions or bananas or tomatoes directly from producers while the delivery would be taken care by Twiga Foods Ltd., a startup firm of the country. As a result, the woman trader, Wacheke, is saved from making a trip to the market.

The procedure allows her to have a positive impact on creating a solid credit track record since it reduces her costs and saves considerable time because there was no need to bargain on prices. Bloomberg quoted her saying that “My prayers have been answered. In business, you need to be fast. The more you pay, the more you get bigger loans, and the more you can sell. It has really helped me.”

Twiga has deployed blockchain technology, which is also used to digital power currencies such as bitcoin, to observe how she manages her business. That included how she is ordering the stock and the habit of repaying. The application focuses on revenue from acquiring fresh wholesale products and then selling it to retailers.

International Business Machines Corp. (IBM) has developed this mobile blockchain platform, and this is one of the increasing numbers of apps that is focused on addressing the lack of finance issue. Obviously, this is one of the big stumbling blocks for the region to grow.

Informal Sector

A Nairobi-based development economist, Anzetse Were, pointed out the neglect in the data of the informal sector, which was suffering from access to credit. He said that there should be a proper strategy for the informal sector if the financial service providers want to break through the African markets.

The size of the small business is a big one in Africa. An International Finance Corporation data suggested that there was a lending gap of about $331 billion in the region. In Kenya alone, there are an estimated demand of $6.5 billion per year from micro, small and medium-sized enterprises. Wayne Hennessy-Barrett, CEO of 4G, indicated that Sub-Saharan Africa thinks that it would take some more time to create the financial structure required for MSMEs.…

Continue Reading

Japanese corporation starts offering Crypto secured loans

A major Japanese corporation has started offering secured loans to its customers against cryptocurrency funds. The company claims to be the first such service in Japan that offers Japanese Yen in loans by securing cryptocurrency funds as collaterals.

Abic Corporation announced on Friday that they will launch a new bitcoin loan service. The announcement read, “From June 1, we offer loans with virtual currency bitcoin (BTC) as collateral.” They wrote, “In Europe and the United States, services that provide ICOs [Initial Coin Offerings] and loans are increasing, with virtual currency as collateral such as bitcoins.”

The company added further, “Bitcoin secured loan is a service where [customers] can receive loans using bitcoin as collateral as its name implies, but it is Japan’s first service to receive [crypto-secured] loans in Japanese yen.”

The Tokyo based company, founded in 1973, has been in the secured loans business for more than four decades now. They are primarily involved in providing commercial and real estate loans. The company explained the reason they have added digital currency secured loans to their list of offering, suggesting the complex laws in this space. In Japan, an individual could pay as much as 55% in taxes. “In the case of individuals, if you sell your own virtual currency, the [capital] gains on that sale will be miscellaneous income and will be subject to progressive taxation,” said the company.

Selling cryptocurrency is a loss maker in Japan. The offering could help the users in getting yen against their crypto funds which could then be used “for a wide range of purposes such as new virtual currency purchases, [and] tax payments.” It helps users in getting access to their untapped funds, gain advantage of their investments and never have to pay hefty taxes.

Reports from news.bitcoin.com have claimed that 33 taxpayers in Japan with more than 100 million yen in digital assets have declared their assets in 2017. These funds classify as miscellaneous income sans pension income.

Abic Corporation is offering these loans for both individuals as well as businesses. The amount of loan could vary from 2 million yen to 1 billion yen. Loans will be available for a period of one month to 5 years with a maximum of 60 installments. A 20% delinquency charge is also added to the loans. To attract more customers, the company has declared that it would not take any prepayment fee. The annual interest payable on these loans could range from 2.98% to 15%.

The company added, “We will keep your [cryptocurrency] deposit and set the pledge…As a general rule, pledges are set in the virtual currency of the collateral, but it is possible to sell as soon as the market price rises.”

While the company is holding bitcoins as collaterals for the users, it will ensure that users get any forked coins arising in due course of time. It noted, “Even if you receive loans with bitcoins as collateral, there is no worry that the right in division will be lost.”

Recently, some Japanese exchanges had to face the ire of investors who filed a class action lawsuit against them for not providing them the forked coins.…

Continue Reading

How a Woman is Making Business with Cryptocurrency and is now Set to Launch her Own?

This is one of the interesting stories behind the success of Elizabeth White with the help of a digital wealth of digital currency holders for luxurious items such as yachts, designer fashion, and Lamborghinis. The woman is clearly taking advantage of the lack of knowledge of the holders in using them for real-world assets. The success enjoyed by her has also allowed White to come out with plans of introducing her own virtual currency known as “White Standard.”

Leveraging Connections

Though there is abundant affluence in the crypto community, they are not involved in transforming their digital wealth. That is primarily due to a number of reasons such as fluctuating values, low daily exchange limits and punishing transactional fees. These things make them trade in cryptocurrencies as a difficult thing. This enabled White to use her connections with luxury car dealerships and hedge funds so that holders of digital coins could get access to Italian supercar. She believes that there is tremendous new wealth within the community of digital currencies. She told Business Insider that “cars seem to be a big seller because it establishes you as a cryptocurrency holder.”

She has expressed her confidence that she could arrange a luxury car dealer in return for cryptocurrencies within a few days. She uses message app, Telegram, to engage in initial exchanges. Elizabeth White that she was able to arrange a big sale from a seller based in California and a Buyer from China for a $4 million car. She indicated that the negotiation was not only quick, i.e., less than a week, but the settlement also happened in about half an hour.

White indicated that she could also use a mix of currencies like fiat and crypto due to hedge fund liquidity. She works for Apis Capital Management and has her own firm known as “the White Company” that could manage fast-paced deals. She took the credit for converting someone’s holding of cryptocurrencies very quickly. She said, “I can take these large amounts of money and purchase the items for my client, and then re-ingest their cryptocurrencies back into the fund.”

White has managed transactions that ranged from engagement rings to honeymoons to luxury fashion items to yachts and super bowl sites. She believes that it is a key factor in validating digital currency functioning with the capacity to transform into real-world goods. She thinks that holders of digital coins should have the capacity to acquire something in the real world.

Launching Of Digital Coin

White has earned experience in making use of virtual assets for tangible goods and forced her to think differently. She is planning to launch her own digital coin, “the White Standard.” She thinks that it could be used to manage most of the online transactions on someday if not immediately.

White Standard is termed as a ‘stable coin,’ unlike bitcoin. The objective of the token is to serve as a digital commerce means. White indicated that every asset built on blockchain application would have the backing of the American Greenback. Therefore, it would ensure the real-world value.…

Continue Reading

A Crypto Firm Raises $325 Million for a Chemical Plant

RCL Chemical transferred its first loan installment to Pike County from a $400,000 loan it received in 2014. The company promised hundreds of job opportunities in Eastern Kentucky through a chemical plant which would convert natural gas into numerous liquid products.

The payment money, $50,000 was raised through an unconventional source, i.e., digital currency. An industry which has faced heated repercussions from the U.S. Securities and Exchange Commission.

In May, Y2X Infrastructure, a virtual currency investment company based in New York, agreed to pay $325 million as funding for RCL’s natural gas conversion plant in Eastern Kentucky. Y2X was also created less than a month ago which defines itself as a “blockchain-centric company,” that uses digital currency to fund promising projects.

William Johnson, RCL Chairman, and Chief Operating Officer said that his company used Y2X’s funding to pay its loan. In August 2014, the country agreed to RCL’s proposal and funded $400,000 for kick starting its operation and rejuvenating its economy.

As per Pike County’s deputy judge-executive, Herbie Deskins, the decision commenced friction between Pike and Floyd counties that caused a delay in the project. Afterward, a lawsuit was filed against RCL by Pike County Fiscal Court that did not proceed with the protocol. Deskins said, “If a lawsuit had been filed when they first wanted to, it would’ve bankrupted the project,” Deskins said.

However, Pike and Floyd County Officials complimented the decision as the plant would provide hundreds of jobs amidst a decrease in coal employment to 4,042 in 2017 from 13,679 in 2011. At that time Ben Hale, Floyd County Judge-Executive, “It could change the face of our coal economy,”

Project’s future now entirely depends on the cryptocurrency investment model and Infrastructure developed by Y2X. On the other hand, Jay Clayton, SEC Chairman, advised investors to be careful of crypto-based companies as their legality and trustworthiness has not been determined.

Clayton said, “A number of concerns have been raised regarding the cryptocurrency and (initial coin offering) markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.”

Meanwhile, Y2X avoided any comments on its dealings and investment model.

The success of the project is still doubtful as a 2017 study by researchers at the MIT Joint Program on the Science and Policy of Global Change stated that natural gas to liquid projects could not survive in the long run. Jonson noted that company’s Floyd plant would focus on producing specialty waxes instead of other fluids. The waxes can be used in various products including shampoo and candles.

He added that Floyd County would become the first to develop such products in North America. He hopes that construction will start this fall. Jonson believes that his company would survive in the long run as their arrival has already been late. If the project becomes a success, more companies would expect Y2X to fund their projects making it as important as venture capitalists.…

Continue Reading