Cryptocurrency and Taxation/10%to Tron fan club
Cheerful tidings to my fellow members of this wonderful community, hope you are all doing well and by the grace of God moving forward, today will be discussing on a very interesting topic; Cryptocurrency and Taxation.i will be touch light on terms first before diving in into the course of interest today.
cryptocurrency which is also referred as digital or virtual currency,can be referred to as a decentralized digital medium of exchange which uses cryptography to verify and secure transactions.in essence cryptocurrency is a form of money that exists only in digital form and is not controlled by any organization,governmental body or financial institution.cryptocurrencies possess characteristics such as
1)it is Independent which can also be referred to as Decentralized.
2)it operates only in digital form
3)most cryptocurrency have limited supply
4)it's transaction are fast
5) cryptocurrency transaction are secure and reliable.
Examples of some popular cryptocurrency are; Bitcoin, Ethereum, Litecoin,ripple, Bitcoin cash, Tether,monero,stellar etc
Taxation this can be referred as a process through which the government or other public authority or administration collects money from citizens or entrepreneurs in order to fund public expenses and achieve economic and social goals.this provides a key source for government revenue.and there are several types of taxation; example are
income tax, payroll tax, property tax,sales tax, estate tax,tariffs etc
cryptocurrency and Taxation
The rapid rise of cryptocurrency have paved a new era in the case of financial innovation,also in effect is has brought about different important questions regarding taxation.With the fast and constantly evolving increments of cryptocurrency landscape, many Government and government agencies worldwide are still grappling on how to tax cryptocurrency transactions.lets do well to consider the breakdown of the current cryptocurrency taxation;
Tax Basics
Cryptocurrency is viewed as a property,and not a currency in relation to tac purposes.
Crypto transactions are subjected to capital gain tax or income tax,in consideration of the circumstances.
Tax Reporting
In terms of tax reporting individual income tax return tends to report cryptocurrency transactions on schedule D,and Foreign Bank account report (FBAR) reports foreign cryptocurrency accounts and transactions.
Tax implications
When considering tax implications alot of things come to mind and this includes;
Mining cryptocurrency: income tax tends to have an effect on every value of cryptocurrency earned.
Buying and selling: capital gain tax tends to apply to the profit made from selling crypto.
Income tax also applies to the value of goods and services received
Airdrops and forks:when it comes to this tax implications tend to change in consideration of the specific circumstances.
key points
In order to accurately report Cryptocurrency transactions, record keeping is a very crucial aspect,not just any form of record keeping but accurate report.
It is always very important that one consults a tax professional for proper and specific guidance on the issues of Cryptocurrency taxation.
Since we are in an ever growing and ever changing economy,it is always a very good initiative to make ourselves always informed and flexible to changes in tax law.
conclusion
It is a indeed a very complex,and ever evolving landscape when it comes to the issues of Cryptocurrency and taxation.coming to an understanding of the tax basics, reporting requirements and implications are very essential for compliance and proper tax planning.it is very vital that we stay actively informed,always try to consult a tax professional,and we also do our best in keeping ourselves informed and also make ourselves available to always adapt to the changes in regulations in order to be able to properly navigate the world of cryptocurrency taxation.
Thanks for reading..
https://twitter.com/ChiVilla6/status/1791260813874880849?t=OlGhx6C6ai8D-VrrnzHFeQ&s=19
This time most of the countries are looking into Crypto as one of the source for tax revenue and this is happening in multiple countries. Some countries like India have put in higher amount of tax on Crypto income and hoping that things should improve over the period of time but certainly it is a requirement that we need to fulfil as a citizen of the country.
They have banned it because they cannot impose tax in our country, however it is a very instructive article.
You have written quite well in the topic of cryptocurrency and taxation and the characteristics of cryptocurrency you have listed is quite true, easy and fast transactions and a digital asset with it envolving tax laws, thanks for sharing.