Why Should You Trade in Cryptocurrency?

  The modern concept of cryptocurrency is becoming very popular among traders. A revolutionary concept introduced to the world by Satoshi Nakamoto as a side product became a hit. Decoding Cryptocurrency we understand crypto is something hidden and currency is a medium of exchange. It is a form of currency used in the block chain created and stored. This is done through encryption techniques in order to control the creation and verification of the currency transacted. Bit coin was the first cryptocurrency which came into existence.

Cryptocurrency is just a part of the process of a virtual database running in the virtual world. The identity of the real person here cannot be determined. Also, there is no centralized authority which governs the trading of cryptocurrency. This currency is equivalent to hard gold preserved by people and the value of which is supposed to be getting increased by leaps and bounds. The electronic system set by Satoshi is a decentralized one where only the miners have the right to make changes by confirming the transactions initiated. They are the only human touch providers in the system.

Forgery of the cryptocurrency is not possible as the whole system is based on hard core math and cryptographic puzzles. Only those people who are capable of solving these puzzles can make changes to the database which is next to impossible. The transaction once confirmed becomes part of the database or the block chain which cannot be reversed then.

Cryptocurrency is nothing but digital money which is created with the help of coding technique. It is based on peer-to-peer control system. Let us now understand how one can be benefitted by trading in this market.

Cannot be reversed or forged: Though many people can rebut this that the transactions done are irreversible, but the best thing about cryptocurrencies is that once the transaction is confirmed. A new block gets added to the block chain and then the transaction cannot be forged. You become the owner of that block.

Online transactions: This not only makes it suitable for anyone sitting in any part of the world to transact, but it also eases the speed with which transaction gets processed. As compared to real time where you need third parties to come into the picture to buy house or gold or take a loan, You only need a computer and a prospective buyer or seller in case of cryptocurrency. This concept is easy, speedy and filled with the prospects of ROI.

The fee is low per transaction: There is low or no fee taken by the miners during the transactions as this is taken care of by the network.

Accessibility: The concept is so practical that all those people who have access to smartphones and laptops can access the cryptocurrency market and trade in it anytime anywhere. This accessibility makes it even more lucrative. As the ROI is commendable, many countries like Kenya has introduced the M-Pesa system allowing bit coin device which now allows 1 in every three Kenyans to have a bit coin wallet with them.

Cryptocurrency has undoubtedly been a revolutionary concept which sees a booming growth in years to come. At the same time, the concept is a little bit ambiguous and new to most of the people. In order to understand how this whole thing works, we bring to you cryptocurrency news. This will update you further on every type of cryptocurrencies prevailing in the market including the Bitcoin news. Go ahead and enlighten yourself a bit more as to what this whole concept is and how it can benefit you.

If you are looking for a good alternative to cash and credit cards, you can try out cryptocurrency. Today, this currency is quite popular across the globe. A lot of companies now accept payments through cryptocurrency just like a regular currency https://www.mediasnet.net/. Bitcoin is one of the most popular cryptocurrencies, which is why a large number of people have been putting money in Bitcoins. Powered by Blockchain, you can make transactions without any security risks. In this article, we are going to discuss some of the most prominent advantages of cryptocurrency.

Easy Transactions

If you often deal with legal representatives and brokers, you know that they charge heavy transaction fees against each transaction. Apart from this, you have to pay for a lot of paperwork, commissions, and brokerage services.

On the other hand, if you use cryptocurrency, you can eliminate all of the middlemen. You will use a secure network to perform all of your transactions. Each transaction is transparent and won't involve heavy transaction fees.

Asset Transfers

It is easy to transfer the ownership of cryptocurrency from one person to another. Blockchain is behind all of the ecosystems. Therefore, you can perform all of your transactions in a safe and secure environment.

The good thing about cryptocurrency is that it allows you to add third-party approval for future payments. If you have this currency, you can easily make asset transfer without any problem.

Confidential Transactions

In the case of cash or credit, there is a record of every transaction. And these records are also stored with the bank that you have your account with. Whenever you make a transaction, your bank maintains a record of it. Even if you are a business owner, your bank knows how much money you have in your bank account. This is not good from the point of view of privacy.

The beauty of cryptocurrencies is that every transaction is unique. Every deal involves terms of negotiation. There is a push concept that provides the basis for information exchange. Nothing will be disclosed to the recipient except what you allow. So, you will have complete privacy and identity protection.

Low Transaction Fee

If you check your bank statement, you will be amazed to see that the bank has charged you a transaction fee for every single transaction that you have conducted so far. If you perform a lot of transactions every day, the total amount of bank fees will be quite high.

On the other hand, transaction fees in the case of cryptocurrency are very low. However, if you hire the services of a third party for the maintenance of your crypto wallet, you may have to pay for this service. However, these fees are far less compared to the fee charged by conventional banks.

Peace of Mind

You can use the internet to transfer cryptocurrency with complete peace of mind. As a matter of fact, anyone can use this service as long as they have access to the internet. All you need to do is have a basic understanding of the cryptocurrency network. In short, these are just some of the primary advantages of using cryptocurrency.

Tax Planning Shareholder Succession

Items to consider in planning a company buyback or a dividend

When a company repurchases its stock under §302 it is accounted for as a capital asset disposition and is viewed as a sale or exchange for tax purposes. The proceeds from the transaction offset the stock's adjusted basis. The selling shareholder will recognize gain or loss in an amount equal to the difference between the amount received for the redeemed shares and the adjusted basis in such shares. Capital gain treatment may also be advantageous in that capital gains can be fully offset by capital losses and capital loss carry forwards.

Under the current tax regime long-term capital gains and qualified dividends have the same tax rate; a maximum of 23.8% comprised of 20% gain rate and net investment income tax of 3.8%. The "serendipity" of the same rates needs more analysis.

The distinction to make in considering sale treatment is the "power of basis" in the shares redeemed. Redemption treatment may be considerably more advantageous than dividend treatment, when basis is considered. Another tax planning point is that some dividends are not qualified dividends and may be taxed at the maximum ordinary income rate of 39.6%.

Not Essentially Equivalent to Dividends

There are a few ways corporate redemptions can be contemplated for tax planning. There are two tests in §302 that have been delineated in the Code and the Regulations, thus presenting no real problems of interpretation or application. 302(b) (2) Substantially disproportionate redemption of stock and 302(b) (3) Termination of shareholder's interest have stringent requirements to qualify.

Sometimes tax planning needs to use the "Lower Road", after discovering the fact, that for whatever reason a transaction does not qualify as under the two tests above; there is still another tax planning opportunity to make a stock redemption. The legal authority that guides how to affect this type of transaction is not as well described in the law, however it can be structured so that it is likely a transaction will qualify as a redemption under 302(b) (1) and not be equivalent to dividends.

The analytical standard that allows a taxpayer to qualify under 302(b) (1) is known as a "meaningful reduction." This standard to will qualify under 302(b) (1) is similar to 302(b) (2) however the requirements are a little less stringent. Even though 302(b) (1) is less stringent, the regulations are not that concise, § 1.302-2(b) states "the facts and circumstances of each case." Meeting well delineated numerical tests in 302(b) (2) and 302(b) (3) is a preferred method to make a transaction qualify as a redemption; rather than depending on the facts and circumstances.

The influential case concerning 302(b) (1) is United States v. Davis 397 U.S. 301 (1970). The Supreme Court established the requirement of a "meaningful reduction" as the requirement. A business purpose is not a requirement for a redemption to qualify under 302(b) (1). The opinion in this case states, "Regardless of business purpose, a redemption is always "essentially equivalent to a dividend" within the meaning of § 302(b) (1) if it does not change the shareholder's proportionate interest in the corporation. Since taxpayer here (after application of the attribution rules) was the corporation's sole shareholder both before and after the redemption, he did not qualify for capital gains treatment under that test."1

A meaningful reduction concentrates on proportionate interest. "Rather, to qualify for preferred treatment under that section, a redemption must result in a meaningful reduction of the shareholder's proportionate interest in the corporation."2

The Service and the courts mostly focus on control to satisfy the standard of § 302(b) (1). The end product of this standard is a concentration on the percentage of ownership.

It is worth noting that there are several citations where percentage of ownership is not the main factor. In Wright v. U.S, 482 F2d 600, the taxpayer successfully argued that a redemption can still leave a shareholder in control. The Eighth Circuit ruled that a redemption which resulted in a reduction in voting power from 85% to 61.7% was meaningful where 66.67% of the voting power was needed to approve major corporate decisions.

A meaningful reduction was also accomplished when the redeemed shareholder was considered to own stock under §318 family attribution rules. In Rev Rul. 75-512 the shareholder had no power to control the corporation before or after the redemption, either alone or by acting in concert with other minority shareholders.

The meaningful reduction requirement is a more watered-down version of the same concept applicable to substantially disproportionate redemptions. Not Essentially Equivalent to Dividend is not a hot issue with the IRS right now however; the issue has been hotly contested in the past. In the event that a transaction needs to rely on § 302(b) (1) think beyond the basic percentage control.

If you are self-employed and you are making money - you need to consider the obvious benefits of tax planning strategies. Period! It does not matter whether you are a sole proprietor, a partner in a partnership or a shareholder in an S Corporation. If you are successful in your business venture and have a positive cash flow - you need tax planning.

Our tax system is a pay-as-you-go system. The taxing authorities (the IRS & your state tax commission/department of revenue) expect to receive your estimated tax payments evenly throughout the year on income you are earning https://taxontario.ca. The purpose for tax planning is to mitigate any taxes due when it is time to file your tax returns. Some strategies to reduce taxes include: reducing your income, increasing your expenses and taking advantage of applicable tax credits.

One of the easiest ways to reduce your income on your individual tax return would be to contribute to a retirement plan. Whether you put the maximum into an IRA, 401k, SEP or other type of retirement plan, these dollars reduce your taxable income and lower your tax bill. You get to keep more of your money - even though you technically cannot touch it until you are of retirement age. However, there are situations when you can tap into this money and not get penalized --although tax would most likely be due on the distributions. However, that is a subject for another article.

Getting the maximum benefit from expense deductibility requires you to keep detailed records/receipts of deductible expenses. If your itemized deductions are greater than the standard deduction - you will take the larger of the two. Expenses such as: mortgage interest, property taxes, charitable contributions, personal property taxes, tax preparation fees, un-reimbursed job related expenses and investment expenses are all accounted for in the itemized deduction calculation. This also directly reduces the taxable income figure on your tax return - and lowers your tax bill. There are also certain tax credits that will also help reduce your tax if they are applicable to your situation. A few that come to mind are: the earned income credit, education related tax credits, the adoption tax credit, the credit for children, and others.

A CPA can help you figure out what your tax bill will look like at year end by reviewing your income and deduction assumptions. To be most effective - tax planning analysis and strategies need to be considered as early in the year as possible. For 2009, the IRS would expect you to make estimated tax payments throughout the year if you expect your tax bill at the end of the year to be greater than $1,000. For those self-employed people who report their income on Schedule C or who receive K-1's from trusts, partnerships or s corporations, tax planning is a necessity. By working with your CPA on tax planning strategies - you would know if you need to make estimated tax payments or not throughout the year. Getting hit with a big tax bill at tax time is not ideal in any situation.