IRS: Taxes, NFTs and Crypto-Currency

By Staff Reporters

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You have to report your crypto and NFT transactions to the IRS

While not technically new, for 2022 the IRS is making a more concerted effort to track cryptocurrency sales and trades. Whenever you sell or trade your crypto or purchase an item with crypto, you trigger a taxable event. Currently, crypto is taxed like property, making it subject to short- or long-term capital gains taxes. This also means you can report any crypto losses to help offset any gains. Since 2022 saw a drastic drop in the value of cryptocurrencies like bitcoin and ethereum, if you sold or traded your crypto at a loss, you may be able to reduce your tax bill by reporting your capital loss. The same goes for NFTs. 

And though the IRS will flag any unreported crypto gains, if you don’t report a loss that can lower your tax burden, the IRS won’t adjust your return on your behalf. “If you leave it off, it stays off,” said Steber. “Tax deductible losses from your virtual currency activity do have real consequences on your tax return, and can save you real dollars. So I always tell people, if you’ve got something that you don’t fully understand, you certainly should seek out guidance from a trained experienced tax professional.”

CITE: https://www.r2library.com/Resource/Title/082610254

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RIP: Tiantian Kullander – Crypto AMBER GROUP FOUNDER Dies

By Staff Reporters

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Tiantian Kullander, the influential young founder of cryptocurrency company Amber Group, died suddenly in his sleep on Nov. 23, the company confirmed.

The group had just received a $3 billion valuation earlier this year, and was in the process of raising another $100 million—a meteoric success in which he played an integral role after launching Amber in 2017 with a group of finance insiders, including former Goldman Sachs Group Inc and Morgan Stanley workers.

MORE: https://www.ambergroup.io/

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SBF: Apologizes as FTX Scrambles to Live

By Staff Reporters

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Following his crypto exchange’s epic implosion, FTX boss Sam Bankman-Fried (SBF) said he was sorry for mistakes he made, and pledged to “give anything I have to” in order to raise the $4 billion in capital FTX needs to avoid bankruptcy.

As the SEC bear down on the company, shady activities are coming to light: FTX loaned its affiliated firm, Alameda Research, ~$10 billion worth of customer assets to fund high-risk bets, per the WSJ.

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WASH SALE RULE: Not For Cryptocurrency?

By Staff Reporters

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DEFINITION

The wash-sale rule prohibits selling an investment for a loss and replacing it with the same or a “substantially identical” investment 30 days before or after the sale. If you do have a wash sale, the IRS will not allow you to write off the investment loss which could make your taxes for the year higher than you hoped.

CITE: https://www.r2library.com/Resource/Title/082610254

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Don’t get soaked by the wash sale

Even if you sell at a loss from a brokerage account or IRA, it still might not want to permanently exit a portfolio position. It may want to get back into an investment now at a cheaper cost with room to re-grow.

BUT – Just wait a moment, according to the IRS “wash-sale” rule.

The IRS will not count a capital loss if, within 30 days before the sale or within 30 days afterwards, the taxpayer is also buying or acquiring a “substantially identical” investment. The rule applies to investments like stocks, bonds, mutual funds, exchange traded funds and options – but not cryptocurrency.

The basic trick is just keeping track of the days. Another skill is considering what counts as “substantially identical” for the fast-moving investor who sees a buying opportunity either 30 days before or after the day of sale.

An investor could sell a stock and buy an exchange traded fund or mutual fund that contains the stock and not run afoul of the rule, Going the other way, from a mutual fund or ETF containing a stock to a direct stock purchase, also will not trigger the rule, he noted.

EXAMPLE: Suppose an investor has several investment accounts — perhaps one is a long-term account and the other is more for short-term trades. The rule applies across the account. So if one sells and the other buys within 30 days before or after, the wash-sale rule will scrap the capital loss.

Buying and selling shares of two different funds tracking the same index within the 30-day period could also cause the wash sale rule to kick in. However, a move like selling a piece of an ETF tracking the S&P 500, and then soon buying an ETF tracking the Russell 1000 Index would be OK according to a tutorial from Charles Schwab SCHW, +3.70%. “That would preserve your tax break and keep you in the market with about the same asset allocation,” an explainer said.

But while someone’s eyeing a repurchase and letting the wash-sale window close one place, they may have a chance to start the tax strategy process in a different part of their portfolio. “There’s really tax loss harvesting opportunities across a number of different asset classes this year.”

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CRYPTO.com and Celebrity Endorsements?

AFFINITY MARKETING!

Physicians and All Investors Beware!

By Staff Reporters

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Celebrity Matt Damon’s infamous “fortune favors the brave” Crypto.com commercial premiered one year ago today, and its timing couldn’t have been worse. Had you been inspired to buy $1,000 worth of bitcoin on that day (the token was then worth $60,608, near its peak price) you would have just ~$340 now.

Fortune isn’t exactly what’s favored Crypto.com in the year since the ad debuted. The price of bitcoin has plunged ~70%, the company reportedly slashed about 40% of its workforce this summer, and the YouTube version of the Damon commercial has been set to private.

Today, the coin has been pretty stable since mid-June, 2022 and hovering at around $20,000.

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STABLECOINS: Altering the US Banking System?

By Staff Reporters

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DEFINITION: Stablecoins are cryptocurrencies where the price is designed to be pegged to a reference asset. The reference asset may be fiat money, exchange-traded commodities, or a cryptocurrency.

CITE: https://www.r2library.com/Resource/Title/082610254

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In fact, Stablecoins could have such a profound effect on the established banking system that U.S. regulators need to require that the digital tokens fit in without disrupting it, said Martin Gruenberg, the acting chairman of the Federal Deposit Insurance Corp. (FDIC). His remarks were delivered at a Brookings Institution event recently.

Gruenberg’s agency is among the U.S. banking watchdogs that will have significant influence over how stablecoins are regulated, and the FDIC has also had to weigh in with recent sanctions against firms – such as FTX US – that have made claims misrepresenting how FDIC deposit insurance backstops their operations. As U.S. banks have increasingly sought to offer crypto services, including maintaining custody of customer’s digital assets, Gruenberg said that his agency has been cautious about allowing regulated lenders to engage.

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TRANSACTIONAL STOCK ANALYSIS: What it is?

Versus Technical Analysis

By Staff Reporters

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In traditional finance transaction data is guarded by exchanges, brokers, banks and regulators. It’s not accessible to everyone and big players pay a fortune for it.

But, in crypto, Transaction Data is public and on-chain – but it’s not usable by everyone. So, manually making sense of raw blockchain data is practically impossible. The data needs to be processed and analyzed to be made useful. That’s what sophisticated blockchain analytics tools are doing.

The combination of on-chain data and transaction analysis is something that hasn’t been before – in crypto or traditional finance. Getting access to transaction data and tools for searching and analyzing it will unlock a goldmine of potential insight.

People who have been on the inside of projects and see how the sausage is made know that the explanations for price movements are often simple and based on key players buying and selling. When the biggest holders are dumping the price is likely to go down. When a major new buyer takes a position prices are likely to go up.

That’s insight traditional Technical Analysis cannot provide, because it’s limited to looking at price movements. Transaction data, instead, is the underlying activity that generates prices in crypto.

CITE: https://www.r2library.com/Resource/Title/0826102549

Technical Analysis: https://medicalexecutivepost.com/2022/06/23/the-technicians/

Related: https://medicalexecutivepost.com/2022/09/25/what-is-sentimental-stock-market-analysis/

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PODCAST: Turning a PBS Interviewer into an NFT Interviewee

On the Non-Fungible Token Market

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By Vitaliy Katseneson CFA

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Turning a PBS Interviewer into Interviewee
I was interviewed on PBS Newshour about the insanity that is happening in the NFT (non-fungible token) market. You can watch it here. If you read my “I Kid You Not Crazy” article, then you know everything I have to say about NFTs and cryptocurrency. I can sum up my thoughts on NFTs in one sentence: NFTs, just like cryptocurrencies, are a technology of the future, but a speculative bubble induced by excess global liquidity in the present. 

I encourage you to watch this eight-minute video – PBS did a great job. 

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Inflation and Crypto-Currency

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By Staff Reporters

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The inflation-proof nature of cryptocurrency works in the same way as stocks– inflation will cause prices to increase so companies can charge more for their goods which means people are willing to pay.

However, since cryptocurrencies are fairly new and not backed by anything at this point it’s better if they make up a small portion of your portfolio instead of trying to go all in with one coin unless you have enough money lying around where losing some won’t hurt too much.

A lot of corporate investment portfolios have started to include crypto because let’s face it, inflation matters.

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Stay Alert for Investment Scams Involving Cryptocurrency

By Charles Schwab

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Stay alert for investment scams involving cryptocurrency
 
At Schwab, we’re committed to helping you protect your assets. One way we do that is by raising awareness of the increase in fraudulent investment schemes (“scams”) involving cryptocurrencies and digital assets. While investing involves taking some risks, being scammed shouldn’t be one of them.
What do scams look like? Investment scams target investors by promising quick, guaranteed returns. Although “investment pitches” vary, using fraudulent cryptocurrency investment opportunities to entice targets is a common approach.

Once targeted investors indicate interest, they are often instructed to wire funds abroad or to a third party’s personal account, or to transfer cryptocurrency. Fake websites and/or applications often create the illusion of a legitimate trading or investment platform and gain trust. However, once funds have been transferred, they are difficult to trace and retrieve.
5 Investment Scam Red Flags 
Guaranteed” high investment returns, supposedly with little or no risk, and sounding too good to be true.
Unlicensed or unregistered sellers. Use Investor.gov to check out the background of anyone offering you an investment in securities.
Skyrocketing account values. Investments that appear to rapidly increase in value are often fake.
Fake testimonials. Scammers often pay people to provide fake reviews, so never rely solely on testimonials in making an investment decision.
Fake contacts. Take caution if someone approaches you through social media with an investment opportunity. Pretending to be a friend or to have a mutual acquaintance is a common tactic used to gain trust.

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MORE: https://medicalexecutivepost.com/2022/02/22/cryptocurrency-trades-and-income-taxes-2021/

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CURRENCY: Crypto -OR- Fiat?

From Morning Brew

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UPDATE: Cuban’s Crypto, Celsius Network, JPMorgan Chase, and Job Payrolls

By Staff Reporters

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Mark Cuban, the billionaire entrepreneur, has been facing a torrent of criticism for several days linked to a partnership forged with a crypto firm. Indeed, Cuban, an evangelist of the crypto industry in which he has invested, signed an agreement linking his NBA team, the Dallas Mavericks, to the crypto lender Voyager Digital last October. The contract, signed on October 28, is for five years and has a mission to promote cryptocurrencies by making coins more accessible through educational and digital programs.

Beleaguered crypto lender Celsius Network operated as a classic “Ponzi scheme,” the former head of the company’s key investment strategy alleged in a lawsuit, claiming the company used customer deposits to cover huge liabilities caused by reckless mismanagement.

The closely watched criminal trial of three former JPMorgan Chase & Co employees just commenced, with a prosecutor saying they “ripped off” the precious metals futures market with fake orders and defense attorneys saying the orders were genuine. The bank’s former global precious metals desk head Michael Nowak, precious metals trader Gregg Smith and salesperson Jeffrey Ruffo are charged with racketeering and conspiracy in the U.S. Justice Department’s most aggressive case to date targeting the manipulative trading tactic known as spoofing.

Finally, job payrolls grew by 372,000 in June, according to the Labor Department, easing fears over a potential recession while clearing the way for another round of interest rate hikes by the Federal Reserve later this month and beyond.

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UPDATE: Sentient GOOGLE, Corporate Earnings, the Markets and Cryptocurrency

By Staff Reporters

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Blake Lemoine, an engineer for Google’s responsible AI organization, described an AI system that he has been working on since last fall as sentient, with a perception of, and ability to express thoughts and feelings that was equivalent to a human child. He was promptly suspended.

Earnings Are Under Threat. Companies from Target to Microsoft have warned their results will be lower than expected, while analysts have trimmed earnings forecasts across industries. Investors will get further clarity next month when companies begin reporting results for the second quarter.

The S&P is in a historic slump having fallen in nine out of the past 10 weeks for just the third time since 1980. And cryptocurrencies, which trade 24/7, tumbled following another red-hot inflation report.


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UPDATE: Vitalik Buterin, Recession Risk the Euro and BOA

By Staff Reporters

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  • Vitalik Buterin tweeted Friday that he’s no longer a billionaire. Crypto has crashed in recent weeks amid a broad sell-off in traditional markets. Ethereum cofounder Vitalik Buterin tweeted Friday that he’s no longer a billionaire. Buterin, who cofounded the blockchain network in 2014, has seen its Ether token crash by 59% since hitting a high of around $4,800 in November 2021, when his holding was valued at around $1.5 billion.
  • Historically, the S&P 500 has fallen an average of 29% around recession (median of 24%). With the S&P 500 currently showing a peak-to-trough decline of almost 19%, the market is effectively already pricing in a 60%-75% chance of recession based on the average and median.
  • Thanks to a surging US dollar and a faltering Euro, many analysts expect that the two currencies could reach parity this year—meaning one dollar would fetch you one euro. The two currencies haven’t reached a 1:1 exchange rate since 2002, three years after the euro was introduced in an effort to bring stability to Europe. The euro closed at $1.057 against the dollar, just 5% above equal value with the US currency.
  • Finally, the current market plunge hasn’t yet scared investors like downturns in years past. Bank of America’s private clients are still dedicating 63% of their portfolios to stocks, compared to 39% after the 2008 financial crisis.

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BITCOIN: A Subjective Theory for Physicians

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By Michel Accad, MD

Michel Accad MD Practices internal medicine and cardiology in San Francisco

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Bitcoin Cash - Wikipedia

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In a recent article on the Mises Institute’s Power and Market blog, Kyle Ward appealed to the subjective theory of value to castigate Peter Schiff for his notorious skepticism of Bitcoin:

READ: http://alertandoriented.com/the-subjective-theory-of-bitcoin/

CITE: https://www.r2library.com/Resource/Title/082610254

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What Really is a STABLECOIN?

Types with Guide

By Staff Reporters

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According to Investopedia, a stablecoin is a class of cryptocurrencies that attempt to offer price stability and are backed by a reserve asset. Stablecoins have gained traction as they attempt to offer the best of both worlds—the instant processing and security or privacy of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies.

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Stablecoins are cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (such as precious metals or industrial metals).

CITE: https://www.r2library.com/Resource/Title/082610254

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Key Points

  • Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference.
  • Stablecoins may be pegged to a currency like the U.S. dollar or to a commodity’s price such as gold.
  • Stablecoins achieve their price stability via collateralization (backing) or through algorithmic mechanisms of buying and selling the reference asset or its derivatives.

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UPDATE: The Markets, Crypto and Online Retailers

By Staff Reporters

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  • Markets: After booming stocks had their worst day of the year because of raging inflation, slowing economic growth, and a potential recession.
  • Crypto: Bitcoin and other major cryptos like ethereum also tumbled in the aftermath of the FOMC announcement. They’ve typically tracked the performance of growth stocks, which have gotten hammered on the prospect of higher interest rates.

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Almost every major online retailer reporting earnings with signs of a decline:

  • Wayfair shares cratered nearly 26% yesterday after announcing that its active customer count dropped 23.4% from a year ago.
  • Bed Bath & Beyond reported an 18% nosedive in online sales.
  • Etsy and eBay shares both dropped by double digits yesterday after giving weak guidance for the current quarter.
  • At least five senior executives from Meta’s fledgling e-commerce division have fled in the last six months.
  • Shopify shares plummeted about 15% on Thursday after posting much lower-than-expected earnings.

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Cryptocurrency Trades and Income Taxes 2021

Virtual Currency – Real Taxation

By Staff Reporters

What you need to report to the IRS

The IRS treats virtual currencies as property, which means they’re taxed similarly to stocks. If all you did was purchase cryptocurrency with U.S. dollars, and those assets have been sitting untouched in an exchange or your cryptocurrency wallet, you shouldn’t need to worry about reporting to the IRS.

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Reporting is required when certain events come into play, most commonly:

  • Trading one cryptocurrency for another.
  • Selling cryptocurrency for fiat dollars (government-issued currency).
  • Using cryptocurrency to buy goods or services (e.g., paying for a cup of coffee with cryptocurrency).

A critical distinction to make is that triggering a taxable event doesn’t necessarily mean you’ll owe taxes, said Andrew Gordon, an Illinois-based certified public accountant and tax attorney. Just because you have to report a transaction doesn’t mean you’ll end up owing the IRS for it.

READ HERE: https://www.msn.com/en-us/money/taxes/yes-you-must-pay-taxes-on-cryptocurrency-trades-heres-how/ar-AATamDL?li=BBnb7Kz

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UPDATE: Crypto Advertisements on Super Bowl Sunday 2022

The Crypto Bowl and the Dot Com Bowl?

By Staff Reporters

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CRYPTO CURRENCY: Tonight, about 117 million people will watch celebrities pitch cryptocurrency on the Super Bowl. In what’s being dubbed the “Crypto Bowl,” a batch of crypto exchanges including FTX, Coinbase, and Crypto.com, will air Super Bowl commercials at a cost of up to $7 million per 30-second spot. The game is even being held at a stadium named after SoFi, a company that offers crypto trading.\

BEWARE: https://www.msn.com/en-us/news/us/meet-the-crocodile-of-wall-street-rapper-accused-of-laundering-billions-of-dollars-in-crypto/ar-AATNmv6?li=BBnb7Kz

This isn’t the first time startups from an emerging industry have used the Super Bowl to introduce themselves to a mass audience. Does anyone remember the 2000 Super Bowl between the Rams and the Titans? That was known as the “Dot-Com Bowl.” Startups that were part of the dot-com wave of the early internet bought nearly 20% of the total ad slots in what is considered the peak of that tech bubble.

CITE: https://www.r2library.com/Resource/Title/082610254

Well, that bubble burst. In fact, according to journalist Neal Freyman, of the 14 dot-com companies that purchased Super Bowl ads that year, four are still active, five were acquired, and five (including Pets.com, OnMoney.com, and Epidemic.com) are either defunct or their status is unclear.

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MARKETS and OMICRON Launch Week Ahead

Stock Market Investing Perspectives

By Staff Reporters

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