Guide to Cryptocurrency Taxes: A Guide to Common Tax Situations – Master The Crypto

CryptoCurrency Taxes

The popularity of crypto-currencies is on the surge these days. Although these have been around the corner for just few years, the global commerce has witnessed the uncontrolled dissemination of cryptocurrencies. This phenomenon has propelled the government to come up with taxpaying guidelines.

If you are a crypto dealer, then the term of “taxation” might scare you to death. But IRS is not going to loosen its grip over crypto taxes any time soon. Rather, growing trend of digital currencies will make the government remain vigilant in tax imposition and collection.

A new entrant into the universe of crypto currency might find the procedures entailed in tax filing extremely cumbersome. It is often observed that hassles of these procedural requirements deter the traders from paying taxes. In order to provide you a sigh of relief, I have brought before you this article a comprehensive guidance to common tax complications.

Know about kinds of gains

For analyzing your tax situation, first you need to understand what kind of tax you will be subject to. Since crypto currencies are seen as capital assets, taxes imposed on these are capital gains taxes. However there are two variants of it. On holding digital currencies for more than a year, you are required to pay the long term capital gains taxes. One the other hand, holding currencies for less than or equal to a year, you will be subject to short-term gains.

This is the very basic concept that you must have a knowledge in. gains and losses incurred on multiple sells all throughout the year have to be reported separately. However, these all get clubbed together while determining the effect of trade on the income.

Trading crypto with another crypto

The income you are generating by trading one crypto with another is very much a taxable transaction and you are required to pay crypto tax on it. This is because the IRS perceives crypto trading as an equivalent to stock trading. Let us understand with an instance how your digital currency trading situation is viewed by the government.

Assume you are buying bitcoins with ripple, the first phase for it is cash selling the bitcoins amount that has been traded in exchange of ripple. The second phase is calculation of capital losses and gains on bitcoins on the basis of purchasing price and the sold price. The third and the final phase entails purchasing a fresh investment that is ripple with the original value same as the bitcoin worth when they were exchanged. Therefore, if the ripple value goes down after the exchange has been made you are still liable to pay tax on bitcoin profit.

Exchanging crypto with other product and services

Trading of crypto with products and services will invite a tax situation for you. You can purchase crypto for cash and used the same cash for buying a four wheeler and you will be still recognized as the seller of that crypto currency. While you are dealing in these kinds of transactions, always make sure that you have a ready access to zenledger – a Digital crypto tax software. It will assist you in keeping record of your past and present digital transactions. However, there is an exception for this particular rule provided by the IRS guidelines. In case you donate crypto currencies to a charity, you are not needed to report or pay capital gain tax on it.

Activities of crypto currency mining

Crypto Mining

If you are a professional miner in the field of digital currencies, then you are subject to crypto currency taxes. Even if you are just a beginner and presently pursuing mining just as a hobby, the rule remains the same for you. Both the genres of miners have to add the agreeable selling price to their incomes from successfully mined coins. Schedule C of IRS guidelines illustrate expense and income clauses pertaining to mining as a business activity. However, if you treat mining as a hobby and further supported by the eligibility fulfillment, then the associated expenses are added in Schedule A.

Both the approaches are a sort of mixed blessing for the miners. For an instance, the hobby earning gets lesser income deductions yet it is free from the self-employment tax payment. Whereas, deductions for business earnings are more but necessitates you for paying the self-employment tax.

Importance of record keeping

People often have this question on their minds that “Do I have to report all my crypto transactions?” Or “how much reporting will save me from bearing the brunt of the IRS audit?”  Our suggestion to you is to be as transparent as possible with your digital dealings. Non-reporting may go unnoticed today, but its resurfacing in the future can get you in trouble.

. It will do the receipt compilation job and automates tax filing job for you. Apart from document consolidation, its serves the purpose of paying the right tax amount and eliminates every scope of underpayment or overpayment.Your tax situation is quite similar to a stock trader. Since they have been through this for years now, the tax complications have become trivial for them.

Income generated from crypto dealings is taxable in maximum cases. Every transaction you make comes under the watchful eyes of the IRS. After you are done mentally preparing yourself for embracing the harsh reality, resort to crypto tax calculating application.…

This entry was posted in Crypto.

Rise in Bitcoin Futures Volume Forces Credit Agencies to Downgrade Dealers

In April, it was reported that bitcoin futures markets saw a steady increase in their volume. Recently, it was announced that products from Cboe and CME Group are still experiencing popularity even after bitcoin reducing to considerable lows.

The month of June has been extremely negative for crypto markets which have already been struggling to achieve the heights it ascended last year. The most popular virtual currency, bitcoin core, has lost more than $13,000 in the first half of the year.

The value of BTC spot went down after the establishment of the Cboe and CME Group futures market. It is to be noted that these platforms did not meet with much business after their initial days with less than hundred contracts per day.

Since then, things have changed as both marketplaces have enjoyed an increase in demand for contracts starting from April. On June 11, BTC futures from CME Group greeted more than 3,800 contracts expiring in this month. On the other hand, another giant from the industry, Cboe, enjoyed over 8700 contracts for June 11 which hints that a bearish market leads to an increased interest in futures. After Cboe announced the sales of 19,000 contracts on April 25, the average derivate sales for both the companies have been significantly progressive.

But, as futures market functions, an increase in business will involve financial institutions and clearing houses in the equation. It is believed that credit agencies will be enforcing a credit downgrade to prevent over sales of new contracts. Recent reports suggest that major three rating agencies, S&P, Fitch and Moody’s are discussing about a potential downgrade in credit ratings for banks that clear bitcoin futures.

In October 2016, Standard & Poor’s (S&P) Global, came out with a report that stated the affect blockchain development would have over credit ratings of banks that will employ the technology. Earlier in February, credit agencies looked to downgrade financial entities in case of a volatile increase in the sale of contracts.

However, the report also stated that it is hard to speculate on the extent of impact blockchain will have on the company’s ratings in the industry. The report added that S&P believes “that at the very least blockchain presents an opportunity for financial institutions which can “even generate new revenue streams.”

These agencies believe that providing ratings for BTC based futures is highly risky to the extreme volatility of the market. In case a downgrade is imposed all clearing houses will get affected including banks that provide the contracts directly. Their decision can disturb asset management of any financial entity with its lending requirements.

According to experts, the steep decline in crypto space is due to future products based on digital currencies. The example can be taken from the impact derivate products had on precious metals market and lots of other businesses.

It will be interesting to see the effect downgrade would have upon people interested in bitcoin futures. It is hoped that the step would uplift the crypto space and balance trades in the derivatives market.…

Raj Kundra Gets Questioned Over Bitcoin Fraud Case By The ED

Raj Kundra, the husband of actor Shilpa Shetty, was questioned by officials from Enforcement Directorate in regard to his part in a bitcoin scam. The whole meeting went on for 9 hours, and officials informed that his name came out after a probe in the GainBitcoin fraud case.

One of the members of the questioning team said, “Kundra was called to the ED office and asked about his involvement in the trade, termed illegal by the government. There are few instances of the case that are linked to Kundra and hence, he has been asked to record his statement.”

He denied all the allegations and reminded ED about him being a witness earlier. The GainBitcoin fraud came to light when Amit Bhardwaj and his brother were arrested in Delhi.

They have been charged with duping more than 8,000 investors for Rs 2,000 crore. The case was registered in April against GainBitcoin as they used false and lucrative promises to attract investors.

The Briton, in his defense, said that he was summoned only as a witness by the Enforcement Directorate. He will be co-operating with the authorities as he slightly knows Amit Bhardwaj.

He added that Bhardwaj was about to buy a team in the poker league which made him contact Viaan Industries, his company that runs the tournament. The Briton currently owns the Match India Poker League through this company, in which different teams compete for the title.

After bitcoin’s value skyrocketed in December 2017, many other virtual coins have popped up to gain profits from the momentum. However, most of these virtual coins do not possess a significant value or are part of fraud schemes.

Earlier this year, the Income Tax Department was sending notices to bitcoin dealers on a daily basis that amounted to more than Rs 1 crore. The name of those dealers was submitted to the ED, and the authority started an investigation into a possibility of money laundering and fraud. It was reported that many celebrities from Bollywood might get questioned during the inquiry.

In 2017, Arun Jaitley, Finance Ministry of India, informed that the country had no regulations in regard to virtual coins and Reserve Bank of India did not authorize any company to conduct business through such currencies. The government of India has advised citizens to be cautious of crypto dealings as they are not governed by any agency. Hence, they are termed highly risky.

It is not the first time Kundra has faced a controversy. He was banned for life from any or all cricketing activities after he was found guilty in an IPL betting scandal. His franchise, Rajasthan Royals, was also banned for two years. They recently made a comeback in the IPL season of 2018 under new ownership and management.

Digital currencies do not enjoy a positive outlook from the Indian government. As of now all the activities in relation to digital currencies have been banned, and a three-month window has been given to exchanges and investors to settle their business ending in July.

The case might reveal more people from the celebrity circuit or even politics.…

Brad Garlinghouse Considers China as the Controller of Bitcoin

Brad Garlinghouse, CEO Ripple, took part in a question and answer round at the 2018 Stifel Cross Sector Insight Conference. He gave answers to many intriguing questions asked by Lee Simpson, Stifel Tech Analyst.

In the initial part of the session, he said that blockchain wouldn’t be having a negative impact on financial institutions. According to him, many people have tried to use the technology but a market winner can only be spotted by three indicators:

Customer Traction
Product Market Fit
Regulatory Engagement
He further added that banks would not be harmed by blockchain, but the technology will transform the way our system operates. In a shocking statement, he also declared that China controls bitcoin and asked several questions about the usability of the poster boy of cryptocurrencies.

He then told the crowd that bitcoin is not the magical solution to our financial issues as we thought it would be. The CEO also backed XRP saying that it is the future of liquidity management in the market. As of now, his focus is primarily on emerging crypto markets in the world.

Backing his currency, he informed that XRP was acknowledged as “the best digital asset for settlement.” While comparing his coin with the market leader, he claimed that XRP only takes 4 seconds to settle a transaction whereas bitcoin takes 45 minutes to perform the same process. Being optimistic he stated that banks will always choose a cheaper and more efficient system. As XRP is a superior product at an exceptional price, a bank will use it in any condition.

He added, “A number of prominent people, even Steve Wozniak, has said that he sees a world where Bitcoin is the primary currency. I think that’s absurd. I don’t think that any major economy will allow that to happen. By the way, it doesn’t make sense.”

Garlinghouse then said that only four miners from China produce 50 percent of the bitcoin which essentially describes their control over the digital currency. He then asked that how many people would be comfortable with a China owned currency.

At one moment he advised investors to invest an amount in virtual currencies which they are ready to lose. Nobody knows the future of cyber coins which makes it a better-investing strategy, he said jokingly. He then asked the crowd to ignore everything he said which made them burst into laughter.

The CEO said that he does not aim for the digital asset market and aims for millions of people who are underbanked or unbanked. The ongoing transformation will change the way people interact with a financial entity. He said that the fundamentals of the system could be adapted to upgrade the users of the service.

Ripple is among the more recognized virtual coins, and its value is expected to increase by the end of the year.

Concluding the interview, he stated that we are at the initial stage of a very long marathon. His claims should be conceived with a pinch of salt as the CEO was basically promoting his currency more often than necessary.…

Ex-Telegram Employee Set To Launch a Trading Platform

Anton Rosenberg is set to launch a new digital currency trading platform named Mikado which aims to assist blockchain based start-ups in stabilizing their coin prices.

The former Telegram director of special projects has decided to provide help to businesses planning to launch an Initial Coin Offering (ICO).

This Tuesday, Rosenberg announced that it would guide start-ups that want to minimize the risk of price collapse when initial investors drop their tokens, and an open sale commences. He added, “Many companies who are doing ICOs are trying to get investors’ attention with big bonuses and discounts without a understanding how it will affect the price after the ICO.”

Traditional financial markets have the upper hand because of market makers and underwriters that guide companies to develop their IPOs. On the other hand, ICO markets do not enjoy assistance from mechanisms and institutions for planning release policies of liquid tokens. The former director claimed that Mikado would be the first to do the same job for crypto businesses.

The new crypto exchange will be issuing a derivative for tokens that are sealed like tokens and are dispersed among company’s employees to boost their work with tokens secured for early investors.

Investors will be receiving saleable derivative Mikado Tokens (MKT) after the locked tokens are transferred to a uniquely created escrow account. Finally, the holders of MKT tokens will be receiving their original tokens in an equal amount of their investment after the lock-up period gets completed.

Rosenberg further said, “Locking up coins is a convenient tool, but not very efficient. They can plan several lock-up periods, gradually release their tokens and control the trading volume.” The trading platform claims to establish a “stable commodity-based economy” in the crypto space.

Chief executive, Andrey Nayman, said that the company is not planning to launch its own Initial Coin Offering to avoid any chances of MKT being classified as a security. As of now, the firm has filed a license request for its distributed ledger technology (DLT) in Gibraltar. Afterward, the company has plans to enroll with the U.S. Securities and Trademark Commission.

About blockchain, Nayman said that the mainstream adoption of the technology is not possible until popular regulations are eliminated. He advised launch of proper regulations is necessary for any industry to survive and grow.

He continued that regulators are lacking discipline concerning the industry. Currently, no investor has any particular rights in blockchain projects. Regulators should be working to save the interests of investors and contributors. The CEO stated that America would be the deciding force in respect to the crypto and blockchain industry’s growth.

It is speculated that Mikado will be making a significant impact on the sector especially on new businesses that are waiting for someone to guide them. If the firm is successful in achieving its goal, then it will instantly become a necessity for start-ups and an inspiration for upcoming trading platforms.

But, the road to glory is not as easy as working with new companies and building their product can be very demanding and time-consuming. A failed project might become the end game for Nayman’s company.…

Deepbrain Chain Partners with Singularitynet’s Network of AI Algorithms and Services

 

World’s first blockchain powered AI computing platform, DeepBrain Chain will be announcing its partnership with SingularityNET, the premium open source platform for AI innovators.

The new partnership will allow AI developers, on SingularityNET’s data marketplace, the option to link datasets and power algorithms through DeepBrain Chain’s network. It will also connect agents that link servers together which will provide back-end autonomy without input from the user.

On the one hand, the open source platform is looking to minimize the autonomous interaction between AI agents. Meanwhile, DeepBrain Chain will be developing a platform and marketplace for the training and development of AI models by integrated AI cloud network. The former will be using cloud service provided by DeepBrain Chain to bid enough power for the users of the SNet service. The company hopes to expand the growth of AI in a less centralized manner.

Chief AI Officer and Executive VP of DeepBrain Chain, Dongyan Wang said that his company aims to make more affordable AI which will pave the way for innovation in industries like finance and healthcare. He added, “Being the first AI platform built on the blockchain, we have taken a responsibility to lower computing cost by at least 50{263b85f1ee1f21048dda63f36486adda28bda40a358e2228d65ddfbef2290fbe}. With our new collaboration with SingularityNET, we know we’ll not only lower costs but begin to create a larger network of data sharing to further capabilities of those trying to significantly impact our daily lives.”

It was informed that between 2012 and 2016, 5,154 new Artificial Intelligence companies emerged and 20 to 30 percent of the cost of AI applications comes from the computation. As of now, AI has a market cap of $ 20 billion. In a study undertaken by Narrative Science, it was revealed that 62 percent of the companies would employee AI technologies by 2018.

The new project will create a framework that opens the gate of data transfers between the two participant firms. Thus, a user of one platform will be able to access data present on the other one by back-end transactions. It will eliminate the necessity of paying special attention to a cross-platform interaction.

About DeppBrain Chain

The company claims to decrease computing power costs by 70 percent through its distributed and decentralized blockchain platform. The use of the breakthrough technology empowers data providers and buyers as chances of breach and alterations become technically zero.

About SingularityNET

It is the only firm that lets AI to cooperate and coordinate at a scale which terminates the issue of interoperability. Thus, the strength and capabilities of individual AIs have increased manifolds. AI agents are given the power to buy and sell goods and services across various markets.

It is believed that the new partnership will boost AI acceptance in more businesses which were hesitant to use the technology before. With time, many new functions will be included in the platform which will make the bond last much longer than expected.

As of now, new users can wait for the new venture to get reviewed by experts for avoiding any silly mistakes in their maiden run.…