losses Archives -
In the first edition of The Daily this weekend, we focus on a study estimating that 13 percent of people have used digital coins for payments. We also look at the latest financial report from Nvidia indicating losses due to falling demand for chips used in cryptocurrency mining. Lastly, a broker suspends its crypto CFD offering.
Report: 1 in 10 People Use Cryptocurrency for Payments
The popularity of cryptocurrency as a payment method has been increasing despite the falling price of digital assets over the past year. According to a recent study conducted by cybersecurity company Kaspersky Labs, 13 percent of those surveyed have already used crypto to make purchases.
Almost 13,000 people from 22 countries were surveyed. Commenting on the results, Vitaly Mzokov, head of verification at Kaspersky Labs’ Growth Center said:
Despite a fall in cryptocurrency prices, there is still a strong desire for digital transactions amongst consumers. Our consumer research has found that 13% of people have used cryptocurrency as a payment method, which was surprising to see.
The authors of the study also found that more and more businesses from various sectors such as retail and food services have started offering crypto payment options. For example, a growing number of food delivery platforms now accept cryptocurrency, as news.Bitcoin.com reported recently.
Nvidia Sees 24% Drop in Quarterly Revenue
Leading video card manufacturer Nvidia has announced a significant decrease in its quarterly revenue, which fell 24 percent to $ 2.21 billion from $ 2.91 billion a year ago. The figure is also down 31 percent from $ 3.18 billion in the previous quarter, the company reported. However, Nvidia also noted that for fiscal 2019, revenue was $ 11.72 billion, up 21 percent from $ 9.71 billion a year earlier.
The drop during the quarter that ended on Jan. 27 has been attributed largely to falling demand for chips used in cryptocurrency mining and gaming applications which weighed on the company’s earnings. Jensen Huang, chief executive officer of Nvidia, commented:
This was a turbulent close to what had been a great year. The combination of post-crypto excess channel inventory and recent deteriorating end-market conditions drove a disappointing quarter.
According to Nvidia’s founder, the company’s fundamental position and the markets it serves are strong, despite the setback. “The accelerated computing platform we pioneered is central to some of world’s most important and fastest growing industries – from artificial intelligence to autonomous vehicles to robotics. We fully expect to return to sustained growth,” he added.
The financial report details that in fiscal 2019 Nvidia returned $ 1.95 billion to shareholders through a combination of $ 1.58 billion in share repurchases and $ 371 million in quarterly cash dividends.
Mtrading Suspends Crypto Offering
Mtrading, a broker regulated in Belize, is suspending its cryptocurrency CFD offering. The decision comes in response to weak demand from clients. Traders with open positions in the affected assets now have a close-only feature, Finance Magnates reported. They will not be able to open new trades with cryptocurrency. According to the publication, the open positions on these instruments will be closed at the company’s market close price on Feb. 28.
“While we believe our trading conditions were very good for crypto trading, the demand for these instruments was not what we had anticipated. We still believe blockchain and cryptocurrency has a place in the future, but for now, better opportunities lie in more traditional instruments,” the company said. Like many other financial brokers, Mtrading started offering crypto-based products when the prices of digital assets were on the rise.
What are your thoughts on today’s news tidbits? Tell us in the comments section.
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In this edition of The Daily we cover a number of developments related to different cryptocurrency exchanges. A report shows that Quadriga has “lost” another half a million dollars, Bithumb is expanding its reach to the UAE, and Coinbase has launched a controversial new cloud backup service. Additionally, Chainalysis has raised further funding to help it spy on more blockchain transactions.
EY Issues Quadrigacx Report
Quadrigacx, formerly Canada’s largest cryptocurrency exchange by trading volume, appears to keep digging itself into a hole. Ernst & Young Inc. (EY), which was appointed as the monitor in the case of the company’s bankruptcy, has issued its first report to the Supreme Court of Nova Scotia. The document exposes that last Wednesday, just a day after EY was appointed as the monitor, the exchange team for some reason sent out considerable funds to a wallet it now claims not to control.
The report reads: “On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $ 468,675 to Quadriga cold wallets which the Company is currently unable to access. The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”
EY has made arrangements to transfer the remaining cryptocurrency holdings into a cold wallet which will be retained by the monitor pending further order of the court. It has also secured various electronic devices reportedly used by the reportedly deceased former CEO of the operation, including two active laptops, two older laptops, two active cell phones, two “dead” cell phones and three encrypted USB keys.
Bithumb to Launch UAE Exchange
According to reports from South Korea, Bithumb has signed a memorandum of understanding (MOU) with Abu Dhabi-based Nvelop to establish a joint authorized fiat-to-cryptocurrency exchange in the United Arab Emirates (UAE). Having established a foothold in the region with this partnership, the South Korean group is reportedly planning to further expand its operations in the countries of the Gulf Cooperation Council (GCC), which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
Bithumb has been on an international expansion push recently. Only this weekend news.Bitcoin.com reported that the group has launched a new over-the-counter (OTC) trading platform for institutional clients which will be offered under the Ortus brand owned by its Hong Kong-based subsidiary. It is also reportedly working with U.S.-based Series One to build a security token exchange and talking with Russian companies about possible partnerships.
Coinbase Wallet Offers Cloud Backup
On Feb. 12, Coinbase Wallet notified its clients that they can now back up an encrypted version of their wallet private keys to cloud storage on Google Drive or iCloud. This new feature is meant to help prevent users from losing their funds if their mobile devices are stolen or if they forget their private keys. The company explained that the backup is optional as users must opt in to activate it, encrypted with AES-256-GCM encryption and accessible only by the Coinbase Wallet mobile app. Coinbase also intends to add support for other cloud services in the future beyond Google and Apple’s.
The move was not well received by some members of the crypto community, who fear it sacrifices user security in the name of convenience. Jesse Powell, CEO of competing exchange Kraken, tweeted in response: “I am not a fan of training users on bad security. Cloud storage, while convenient, is constantly compromised, especially with all the SIM porting. 99% chance the people who would unwittingly use this do not have passwords strong enough to withstand professional cracking.”
Chainalysis Secures $ 30M in Funding
Blockchain surveillance company Chainalysis has announced it’s raised a $ 30 million Series B led by Accel, with participation from existing investors. The company plans to use the new funding to grow its global footprint and invest more in new cryptocurrencies and multi-currency support. Chainalysis also officially opened an office in London that will act as a regional hub and plans to double its headcount in the city to better work with the major financial institutions based there, as well as nearby European governments.
Accel stated that it choose to make an investment in Chainalysis because it is a company that “uniquely leverages deep analytics and machine learning to help law enforcement agencies track illicit crypto transactions and financial institutions comply with anti-money laundering rules—important pillars towards the inevitable maturation of the cryptocurrency space.”
What do you think about today’s news tidbits? Share your thoughts in the comments section below.
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Insurers are paying out $ 11.4 billion so far to cover losses caused by the wildfires that ravaged California in November — and that number is going to grow, state Insurance Commissioner Ricardo Lara announced Monday.
“These are massive numbers,” Lara said to reporters. Furthermore, people are expected…
The results of a survey published by Credit Karma estimate that crypto investors in the U.S. realized losses of approximately $ 1.7 billion during the previous tax season. Additionally, the report finds that U.S. investors incurred a further $ 5.7 billion in unrealized losses.
US Cryptocurrency Investors Realized $ 1.7B in Losses During 2018
According to a survey conducted by Credit Karma, investors based in the United States realized a combined loss of roughly $ 1.7 billion during 2018, equating to an average of $ 718 per person. The participants comprised 1,009 U.S. cryptocurrency investors aged 18 or older who were questioned during November 2018.
The survey found that only 53 percent of investors had decided that they would report their cryptocurrency gains and losses on their tax returns. A further 19 percent of participants stated that they had not yet decided whether they would report the performance of their cryptocurrency investments.
According to the report, 59 percent of profitable traders intended to report their returns, whereas only 38 percent of investors who lost money during the previous financial year planned to do so.
More Than Half of US Investors Unaware of Tax Deductions on Crypto Losses
The survey found that 58 percent of respondents were not aware they can claim tax deductions on cryptocurrency losses, including 61 percent of investors who had realized losses during the preceding tax season.
The report also estimated that U.S. investors had incurred $ 5.7 billion in unrealized losses, suggesting that many opportunities to claim tax deductions have been missed by American cryptocurrency traders.
Of the respondents that stated they would not report the performance of their cryptocurrency portfolio, 35 percent were not aware that they are required to do so, and 55 percent believed that they were not required to due to how small their gains or losses were.
Are you surprised by how few U.S. cryptocurrency investors were aware of their reporting requirements? Share your thoughts in the comments section below!
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The stock market had a sour start to the new year as large technology companies suffered losses in early trading.
Apple and Amazon each fell about 2% in early trading Wednesday, as did Microsoft. Netflix tumbled 3.5%. Markets were closed Tuesday for New Year’s Day.
Stocks are coming off their worst…
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Last Thanksgiving, Bitcoin was in the middle of a bull run that would result in a record high of $ 19,511 just before Christmas. Now, Bitcoin is worth just $ 3,752.
If you bought Bitcoin and other cryptos when their prices were high, there’s a silver lining around the gray state of crypto markets now: any losses you take this year could place you in a lower tax bracket. What’s more, claiming those losses is easier than you might assume.
For the purposes of taxation, the US and most other governments consider cryptocurrencies to be assets. This means that whenever you trade cryptocurrency, the transaction falls into one of two categories: a capital gain or a capital loss.
Capital gain: A capital gain occurs when you sell cryptocurrency for more than the amount that you paid to purchase it.
Capital loss: If you sell cryptocurrency for less than the amount that you paid for it, this is considered to be a capital loss.
You have to sell or buy an asset to trigger a taxable gain or loss. Once you decide to make a move, tax authorities consider the loss to be “realized.” If your loss is great enough, you may be able to use it to enter a lower tax bracket.
One of the biggest benefits of claiming a loss is that you can offset income gained from other sources.
In the US, the IRS lets you deduct up to $ 3,000 worth of net capital losses each year from the amount of money you’ve earned at your day job. If the amount you lost was greater than $ 3,000, you can get another deduction of up to $ 3,000 when you file your taxes next year.
If you currently make just over $ 50,000 per year at your job, that $ 3,000 cryptocurrency loss could place you in a lower tax bracket. This could result in thousands of dollars of tax savings.
What’s more, if you’ve earned some income through stocks or through the sale of property, there’s no limit to the amount you can deduct from those revenues.
If you’re in the $ 38,701 – $ 82,500 tax bracket and your crypto capital loss deduction puts you below the $ 38,700 mark, you’d only have to pay $ 952.50 plus 12% of any amount over $ 9,525. But if you made $ 38,701 or more, you’d have to pay over four times as much in taxes, plus 22% of any amount over $ 38,700.
In other words, if you fail to deduct your crypto losses and you fall into the third bracket as a result, you’d have to pay at least $ 4,453.50 to the IRS. But if you do file your losses and make it into bracket two, you’d pay just $ 952.50.
Total tax savings: $ 3,501.50.
If you’re married and filing jointly or widowed, moving into a lower tax bracket can result in even more tax savings. If you made $ 77,402 in 2018, you’d have to pay the IRS $ 8,907 and change.
Dropping down to the $ 19,051-$ 77,400 tax bracket by filing a crypto loss would save you $ 7,002.
In addition to cryptocurrency traders, cryptocurrency miners can use deductions to reach lower tax brackets.
A notice that the IRS published in March of 2014 provides some relevant details:
“…when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income.”
If the value of the cryptocurrency you mined decreased and you decide to sell it, then that would mean that you have triggered a capital loss. You can report this loss in the same way that you would if you bought and then sold your coins through an exchange.
IRS analysts told CNBC that electricity costs and other expenses may be written off as well.
Figuring out how much you’ve made or lost can be a headache, particularly if you haven’t been keeping track of your purchases or if you placed a huge amount of trade orders last year.
Sorting out how much you lost or earned requires access to historical pricing data. Without that historical data, you won’t be able to determine what the price of your crypto asset was when you bought and sold it.
Fortunately, there is software available that can crunch all your crypto tax data for you.
With CoinTracking.info, can import your transactions from all your cryptocurrency wallets and exchanges. The interface walks you through how to do the imports.
At the end of the import process, you can download IRS form 8949. This is the form you need to submit to report your loss.
Other download options include CSV, TaxACT and TurboTax.
If you use a crypto tax calculator to do your own taxes, filing your taxes is a straightforward process. All you have to do is take the total from IRS form 8949 and transfer that to IRS form 1040 Schedule D.
In fact, most CPAs that work with crypto traders use CoinTracking and other publicly available software to determine what their clients owe. These tools are not difficult to use. Many have free trials, which let you see how they work for yourself before you commit.
If you lost money in crypto markets last year, you may be able to offset some– or perhaps even all– of those losses at tax time. Reporting your capital losses might help you move to a lower tax bracket. If your deductions qualify you for a lower bracket, filing them could save you thousands of dollars when you submit your taxes this year.
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Taxes have been a hot topic in the cryptocurrency world this year. Many countries have been trying to figure out how to tax crypto assets, while traders have been figuring out how to lever them to write off losses. As bitcoin and other cryptocurrencies enter the mainstream, tax reduction strategies are starting to emerge.
Governments Belatedly Address Bitcoin Taxation
As cryptocurrencies have entered the collective conscious and adoption has grown, governments have been trying to figure out how to tax them. Most recently, the U.K. government released a sprawling crypto tax advice document. Her Majesty’s Revenue and Customs (HMRC) reveals in the document that individual investors will be liable to pay capital gains tax each time they sell crypto assets such as BTC for profit. HMRC ruled that investors would not be allowed to classify their investment in cryptocurrency as “gambling”, which is tax-free when it comes to winnings.
At the beginning of the year, U.K. Prime Minister Theresa May said her government would be looking at bitcoin and cryptocurrencies “very seriously” because of their potential to be “used by criminals.”
Elsewhere in Europe, the European Union has been advised to devise common cryptocurrency rules – and that includes tax. While Switzerland has decided to do away with regulation, the Swiss Federal Council has stated that it wants “the best possible framework conditions so that Switzerland can establish itself and evolve as a leading, innovative and sustainable location for fintech and blockchain companies.” In Russia, while the government is working out a regulatory framework, citizens are obliged to pay 13 percent tax on their crypto-related incomes.
This year in Asia, Korea said it is planning to tax cryptocurrencies and initial coin offerings (ICOs), while proposals to lower taxes on crypto in Japan were announced this month; currently the government can take as much as 55 percent from cryptocurrency transactions as miscellaneous income.
Taxation guidelines in the U.S. have generally been unclear. On Dec. 21, lawmakers filed a bill to create tax exemptions for certain cryptocurrency transactions. The state of Ohio also said it would accept BTC from its citizens to pay taxes.
Meanwhile, South Africa’s government, generally considered to be crypto-friendly, this year said income accrued from crypto transactions must be declared – and said it would be cracking down on tax-dodging cryptocurrency traders.
How Cryptocurrencies Can Help You Save on Taxes
While governments are figuring out how to tax cryptocurrencies, there are actually ways in U.S. citizens can use them to their advantage to pay less taxes. This is due to a 2014 notice by the Internal Revenue Service (IRS) which treats cryptocurrencies as an investment property, rather than a currency. Whenever you trade cryptocurrency, the transaction is either a capital gain (where you make money) or a capital loss (where you lose money). And any losses this year could ultimately place you in a lower tax bracket.
The IRS allows taxpayers to deduct $ 3,000 in capital losses for any given year from money earned from a day job. Losses beyond that cannot be deducted until several years later.
As an example, let’s look at someone who bought $ 5,000 worth of BTC this year. After turning that into $ 10,000 through trading, they later lost cash due to a dip in the markets and took a big hit, losing $ 8,000. They cashed out, walking away with just $ 2,000. They would then be able to harvest a loss of $ 3,000 for the year which would be deducted from their taxable income. If that person made $ 50,000 in regular income, only $ 47,000 of it would be taxable.
In order to write off cryptocurrency losses as tax deductible in the U.S., it’s essential to properly file, with exact dates, all transactions incuding gains and losses. Certain online tools, such as bitcoin.tax, can be useful in calculating capital gains and losses. While 2018 has been a bad year for cryptocurrency investors, the ability to write off thousands of dollars of bad trades should provide some consolation.
Disclaimer: This editorial is intended for informational purposes only. Bitcoin.com and the author are not experts on taxes and cannot be held responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by following the information in this article.
How have you managed with taxation on your crypto assets this year? Let us know in the comments section below.
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Nissan’s former Chairman Carlos Ghosn was re-arrested on suspicion of shifting personal losses to Nissan, derailing his plans for bail.
WSJ.com: US Business