· April 2, 2018 · 1:00 pm
‘They’ll Never Catch Me’ 52% of People Say About Paying Crypto Taxes
A recent poll on Twitter held amongst more than 7,500 people showed the abrogating reaction of the majority when asked about the way they handled their taxes associated with crypto investing and trading. Only a fifth of the participants revealed that their taxes are already filed and paid.
Catch Me If You Can
A cryptocurrency taxes poll posted on Twitter on April 1st quickly caught up to speed with more than 7,500 people already taking part.
Ok US people, crypto taxes:
— Ryan Selkis (@twobitidiot)
Despite the stipulations of the first and only issued by the IRS on cryptocurrency taxation, people are clearly disregarding regulations, relying on the fact that the agency will simply ignore or fail to identify any misconduct.
Over are already proud owners of cryptocurrency, and an estimated have used their school loans to invest in cryptocurrency. With the increasing number of people getting involved in the field, one can see how this could become an issue.
What Does the Law Say?
In the aforementioned guidance, the IRS has clearly stated that instead as currency, it shall treat cryptocurrency as property for the purpose of taxation. Furthermore, the term ‘cryptocurrency,’ according to stipulations, includes anything which is considered to be a ‘convertible virtual currency’ having an equivalent in real currency or it acts as a substitute of the same.
It’s true that not all cryptocurrencies are acting this way. However, the majority of the leading ones, including , do.
And since ‘it is all we have to go on,’ in the words of tax attorney Sarah-Jane Morin, referring to the guidance, it might be a good idea to have a quick look at a few things you should be aware of when it comes to your cryptocurrency taxes.
Save Your Trading Logs
Just as you don’t want to be worried looking for a reportable receipt, you don’t want to have to go through hundreds of trades to find the one that’s giving you headaches.
“Going forward, it would probably be easier to keep detailed records of what you bought and when you bought it,” Morin .
Adding to this, the IRS treats as property, as outlined above. In other words, you will have to pay taxes if you have realized a capital gain or you could lower your tax bill if you’ve ended your run at a loss.
The following information should be gathered:
- Time of the purchase
- Amount you invested
- Time of the sale
- Amount received
From then on – it’s a matter of doing the math.
You’ll Likely End Up Having to Do the Reporting Yourself
When you’re dealing with the sales of stocks or bonds, the brokerage firm you’ve engaged or the bank is going to send you a 1099 tax form to fill out.
“That’s not the case for all crypto-exchanges or most transactions,” says Janna Herron, tax researcher.
Coinbase, for instance, which is among the most popular exchanges in the US, will only when you’ve hit $20,000 in gains or went through at least 200 transactions. Obviously, that’s not the case for the regular, small-time investor.
“What that means is the onus is on you to figure out the tax obligations,” says Herron.
Don’t Do the Crime If You’re Not Prepared to Do the Time
Hiding information from the has never been the brightest of ideas. While you may fly under the radar temporarily, in the future, hidden trades might resurface and when it happens, you might get the ax.
While the guidance isn’t as legally binding and is far from being a regulation, it does make certain comments on the stiff penalties non-compliant taxpayers might face.
In certain cases, “taxpayers could be subject to criminal prosecution for failing to properly report the income tax consequences of virtual currency transactions,” on Friday, March 23rd.
What’s your position on crypto-related taxation? Don’t hesitate to leave your thoughts in the comments below!
Images courtesy of Pixabay, Twitter/@twobitidiot, and Bitcoinist archives.
Published at Mon, 02 Apr 2018 17:00:16 +0000
Altcoin News
You might be interested in …
iXledger（InsureX）
iXledger（InsureX） blog：http://www.tanakashigeru9.com/entry/2017/09/27/142852 website：https://www.ixledger.com/ medium：https://medium.com/@ixledger telegram：https://t.me/iXledger
Bitcoin Lightning Network Is Coming: Test a Transaction Now
Although bitcoin has managed to gain credibility and legitimacy in the financial world, skyrocketing transaction fees and long transaction times are becoming an increasingly severe handicap. The good news is that developers are making progress towards the bitcoin Lightning Network (LN) implementation. LN promises to reduce bitcoin’s transaction fees dramatically, and achieve near-instant transactions. You can test a bitcoin LN transaction right now.
Lightning Network Promises to Reduce Transaction Costs and Confirmation Delays
bitcoin users are unhappy about the high costs of transaction fees. bitcoin average transaction fees have spectacularly surged from about $0.69 USD in January 2017, to over $28 USD on December 18, as shown in the chart below. BitInfoCharts provide this chart.
Moreover, the bitcoin network traffic has become clogged due to the rising demand for transactions per block. As a result, confirming bitcoin transactions is taking an extremely long time. Bitpay :
Block sizes are limited, so this means that transactions which exceed the capacity for a block get stuck in a queue for confirmation by bitcoin miners. This queue of unconfirmed transactions is called the bitcoin mempool.
Now, bitcoin enthusiasts and cryptocurrency experts are centering their hopes on the LN approach to reduce transactions fees and long time-delays.
Solving bitcoin Scalability Problem
The bitcoin Lightning Network is essentially a decentralized system where users can set up trustless micropayment channels to conduct one or multiple payment transactions off-blockchain.
These channels reside outside the bitcoin blockchain. However, once the payment channel is closed, the transactions that occurred between the channels are then broadcast, as a single transaction, to the main blockchain network. Thus, no matter the number of micro-transactions conducted, the blockchain is accessed only twice, when the channel is opened and when the channel is closed. Obviously, this approach would significantly reduce the load on the blockchain.
Presently, three teams are independently working on the LN implementation: ACINQ, Blockstream, and Lightning Labs. In early December 2017, they that their respective systems had completed payment tests on the main bitcoin network. Moreover, these tests achieved interoperability across all three implantations.
Right now, to educate potential LN users, the website allows you try a testnet bitcoin LN transaction. Reddit user Nabugu provides the details of the test .
As demand for bitcoin continues to grow, transaction costs and time delays are bound to get worse. However, many bitcoin enthusiasts and experts are excited about LN. For example, Ryan Radloff, co-founder, and principal at CoinShares, explicitly CNBC that LN was the solution, adding:
[LN] is a technological implementation that, later this year, is going to solve this [problem], and we’re very excited about that.
What do you think would be the impact on the cryptocurrency ecosystem when bitcoin Lightning Network starts allowing users to make cheap micropayments at near-instant speed? Let us know in the comments below.
Images courtesy of AdobeStock, ACINQ, BitInfoCharts
The post appeared first on .
How "Crypto" Currencies Work – A Brief Overview Of Bitcoin, Ethereum & Ripple
[ad_1] “Crypto” – or “crypto currencies” – are a type of software system which provides transactional functionality to users through the Internet. The most important feature of the system is their decentralized nature – typically […]