Connect with us

crypto-

IRS Releases Tax Guidelines for Cryptocurrency

Published

on

Earlier today, the United States Internal Revenue Service issued its first guidance since 2014.

The U.S. Internal Revenue Service (IRS) issues new guidance in the form of a Revenue Ruling, which calculates taxes owed on cryptocurrency holdings.

The publication is the IRS’s first guidance in half a decade. The previous one has many unanswered questions as a result of the growth and complexities prevalent in the crypto market. Accordingly, the publication revealed the U.S. government’s position on taxing virtual currency like crypto. Notably, it addresses the tax implications of a cryptocurrency “hard fork” to the owner of the cryptocurrency.

More details

The guidance particularly touched common questions taxpayers and tax practitioners ask about the taxation of a cryptocurrency hard fork. Additionally, there are sets of FAQs clarifying virtual currency transactions like the acceptable methods for valuing cryptocurrency received as income. Also, how to calculate taxable gains when selling cryptocurrencies.

Taking a look at the content of the guidance, the Revenue Ruling 2019-24 asks two questions. Afterward, it provides the answer in a six-page analysis.

Firstly, it asked: “Does a taxpayer have gross income under § 61 of the Internal Revenue Code (Code) as a result of a hard fork of a cryptocurrency the taxpayer owns if the taxpayer does not receive units of a new cryptocurrency?”

The second question was: “Does a taxpayer have gross income under § 61 as a result of an airdrop of a new cryptocurrency following a hard fork if the taxpayer receives units of new cryptocurrency?”

Based on the guidance, the answer to the first question is “No”. This is because the taxpayer didn’t “receive” the cryptocurrency. Thus, he/she doesn’t have accession to wealth and attributable gross income.

Also, the answer to the second question is “Yes”. This is because the taxpayer received the cryptocurrency.

There will be a need to clarify what it means to receive cryptocurrency. Thus, avoiding tax liability on phantom income, which are crypto that are neither received or liquidated.

Responses on the development

IRS Commissioner, Chuck Rettig commented on the guidance. He said: “The IRS is committed to helping taxpayers understand their tax obligations in this emerging area.”

“We want to help taxpayers understand the reporting requirements as well as take steps to ensure fair enforcement of the tax laws for those who don’t follow the rules,” Rettig added.

On twitter, it attracted mixed responses.

@bagpipeman2009 believes it’ll be a difficult path for the IRS. He tweeted: “Lol the IRS just created their own tax nightmare.”

Similarly, @Bohrzor said: “The amount of people that are actually taking IRS crypto guidelines seriously on here is astonishing to me.”

In contrast, @CryptoPodcast1 seems to predict a bullish effect. He said: “I’ll buy a lime green suite after.”

News Source

Click to comment

crypto-

UNICEF’s crypto fund shows Bitcoin is accepted as financial asset

Published

on

Bitcoin, the king coin with a market share of 66.8 percent, continues to be the market mover as it attracts more sectors. This time around, the news broke from UNICEF as the agency announced that it would be accepting the largest cryptocurrency along with Ethereum for donation with the launch of UNICEF Cryptocurrency Fund. Moreover, the agency will not be converting the crypto donations to fiat, rather will be held and distributed in crypto.

The announcement read,

“In a first for United Nations organizations, UNICEF will use cryptocurrecy fund open source technology benefiting children and young people around the world.”

Michael Novogratz, founder and CEO of Galaxy Digital, spoke about the United Nations agency accepting cryptocurrency, in an interview with CNN. He stated that this shows that more people have started to accept “Bitcoin as a financial asset.” The Bitcoin proponent also pointed that contrary to UNICEF’s crypto fund, there were some charities that accepted Bitcoin, but would later see it for fiat mainly because “they’re more conservative.”

Subsequently, Novogratz also brought up Yale’s venture into the cryptocurrency space toward the end of 2018. The second-largest endowment in higher education backed a multi-million dollar crypto-fund, Paradigm by helping it raise $400 million. He said,

“[…] usually where Yale goes all the rest of the endowments follow. They’ve made investments in Bitcoin. Yale, Harvard and Standford have all invested and ventured funds that own bitcoin and venture properties in the space.”

This was followed by Novogratz speaking about the diversity of the cryptocurrency market and communities, and the on-and-off brawl between communities on social media platforms. To him, Bitcoin is the only cryptocurrency that has “a store of value lane.” He went on to say that Gold, which has a $9 trillion market cap, has value because “we say it’s valuable,” whereas the rest of the elements in the periodic table has value because of its use-case. He said,

“I think Bitcoin is going to be valuable just because we say it’s valuable but the rest of the cryptocurrencies are going to need to be used and it’s going to take a while for those economies to develop right? We had a bubble they all went up because they were all the next bitcoin in fact they are all not the next Bitcoin.”

Novogratz added,

“It doesn’t mean the Ethereum project isn’t an awesome project. In three or four or five years, it could be a spectacular project. It might have a huge amount of value but it’s not going to get the value the same Bitcoin does “

Source:ambcrypto

Continue Reading

crypto-

Fidelty quite cautious about offering crypto says exec

Published

on

American firm Fidelity Investments has voiced the strict regulatory plans implied to cryptocurrencies in order to support the protection of its clients. Kathleen Murphy, an executive, stated about the measures taken against what to offer on the network. Fidelity is expected to roll out Bitcoin trading for institutional clients in May of 2020.

The personal investing president of American financial services company Fidelity Investments, Kathleen Murphy, has stated that the firm does not offer cryptocurrencies on retail trading platforms to ensure the protection of its clients. Murphy asserted this viewpoint during an interview with CNBC published on Oct. 11. After the interviewer asked when she expects users to trade cryptocurrency “in a meaningful way” on Fidelity’s platform, Murphy replied: “You know, we’re really careful about that. So we embrace crypto in terms of trying to understand it and be innovative and thoughtful. We’re also very careful about where we offer those types of things, so they’re not offered broadly on the retail platform. We want to be very careful about making sure that investors who really aren’t institutional investors […] don’t make a mistake with cryptocurrency.”

The firm is geared up to commence Bitcoin Trading for institutional clients in May 2020. Currently, it holds a total of $7.4 trillion worth of customer assets under its management.

Disclaimer: Coinnounce’s views are not necessarily reflected in the articles published, and they are the sole representation of the author’s opinions. Article’s information should not be taken as investment advice. Risks are involved in cryptocurrency investments and trading. Readers are urged to carry out extensive research before making a decision.

Source:coinnounce

Continue Reading

Crypto

Draper-Backed Startup Launches .Crypto Domains on Ethereum

Published

on

A startup building domains on blockchains has just launched a .crypto name registry on ethereum.

Unstoppable Domains – a firm backed in May to the tune of $4 million by Draper Associates and Boost VC  – said Friday that the new .crypto extension can be connected to users’ public cryptocurrency address, allowing third-parties to more easily send funds.

Doing away with long, complex crypto address (for example, a bitcoin address will look something like “1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2”) in favor of a more memorable and less mistake-prone domain will “simplify cryptocurrency payments and lead to mainstream adoption,” Unstoppable Domains claimed.

The firms indicated it’s already seen a high level of interest in its first domain extension, .zil, with over 100,000 having been sold.

The original service was built on the Zilliqa blockchain (hence the .zil domain) and the website content was stored on the InterPlanetary File System (IPFS) or other decentralized storage networks, the company said at the time.

While the new registry is built on ethereum, it isn’t restricted to payments in ether.

Co-founder and CEO Matthew Gould commented:

“We believe that tribalism in the crypto community is slowing down adoption of the technology. .Crypto is a domain name system meant to be used for any cryptocurrency payment and with any cryptocurrency wallet. Sending money to a .crypto domain is a way simpler user experience for the millions of cryptocurrency users that currently have to copy/paste and type in long addresses in order to transact.”

The firm’s blockchain domains can also be used to provide “uncensorable” websites, it says on its website. Linking the domain to content on a decentralized storage network results in pages that “no one” can take down.

Using an immutable blockchain for web domains can have its downside, however.

As reported last week, a hacker exploited a bug in an auction run by OpenSea for the Ethereum Naming Service (ENS) resulting in a number of top level names – including apple.eth, defi.eth, wallet.eth, and pay.eth. – being nabbed with no way to retrieve them.

After OpenSea appealed to the hacker and offered a reward, the domains were handed back.

Source:coideK

Continue Reading