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Cryptocurrencies, such as Bitcoin, Litecoin, Ethereum, and Ripple, make the U.S. Internal Revenue Service (IRS) nervous. They want to know what you're up to so that they can tax it, and due to COVID-19, you must file your 2019 income tax by July 15, 2020.

On their new Schedule 1 form, the IRS has thrown in a new question: "At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?"

RELATED: IS NASA DEVELOPING ITS OWN CRYPTOCURRENCY?

Unless you have a death wish, or don't mind doing hard time, you've got to include your cryptocurrency dealings on your income tax filing. We're going to tell you how to do it, but first, a disclaimer.

We're not tax professionals, so take the facts provided below as informational only. Also, those living in countries other than the U.S. may have very different income reporting obligations.

The IRS identifies cryptocurrencies as property, just like collectible coins, valuable paintings, vintage cars, or stocks. Property can appreciate or depreciate in value.

You must report all cryptocurrency transactions and all cryptocurrency, or digital currency income even if you didn't receive a tax form from a cryptocurrency exchange.

While some exchanges, such as the popular site Coinbase, provide a transaction history to every customer, they only provide an IRS Form 1099-K to those customers whose transactions meet a certain dollar amount.

According to the IRS website, "A Form 1099-K includes the gross amount of all reportable payment transactions, and you will receive a Form 1099-K from each payment settlement entity from which you received payments in settlement of reportable payment transactions."

The IRS requires you to report your gains and losses on each of your cryptocurrency transactions. You report cryptocurrency transactions at their fair market value in U.S. dollars.

To calculate your gains and losses, you'll need the cost basis of each transaction, that is, the amount you spent in dollars to buy the cryptocurrency and the amount in dollars that it was worth when you sold it. You can use losses to offset capital gains, thus making losses deductible.

You must pay taxes on cryptocurrency if you:

You don't have to pay taxes on cryptocurrency if you:

Section 501(c)(3) is the portion of the U.S. Internal Revenue Code that allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations or private operating foundations.

On its website, the IRS states that "Only individuals are required to file gift tax returns. If a trust, estate, partnership, or corporation makes a gift, the individual beneficiaries, partners, or stockholders are considered donors and may be liable for the gift and GST taxes."

An airdrop is a usually free distribution of a cryptocurrency token or coin to numerous wallet addresses. Airdrops are done to help newer cryptocurrencies gain attention and new followers.

Recipients are either selected randomly or the airdrop is publicized on bulletin boards or in newsletters. Some airdrops require joining a group, retweeting a tweet, or inviting new users.

Airdropped cryptocurrency should generally be taxable as ordinary income, and valued at its fair market value on the date of receipt. If your exchange doesn't yet support the new coin, meaning it can't be sold, then it isn't taxable.

A fork is an upgrade to a blockchain network. Permanent forks are used to add new features to a blockchain, to reverse the effect of hacking, or to fix bugs, as was the case with the Bitcoin fork that occurred on August 6, 2010, or the fork that separated Ethereum and Ethereum Classic.

Crypto that is received in a fork becomes taxable when it can be transferred, sold, or exchanged. The IRS discusses forks on its Frequently Asked Questions on Virtual Currency Transactions webpage.

Things get even more complicated if you bought cryptocurrency at different times, then sold only a portion of it. You need to choose the cost based on FIFO (First-in-First Out), LIFO (Last-in-Last Out), or the Specific Identification method, which identifies exactly which coins were sold. This IRS page provides information on this choice.

If there is one thing the IRS has a lot of, it's forms. Some of those you may need to use to report cryptocurrency on your income tax include:

If you followed the last link provided, you land on an IRS page with the word "Attention" in red, which is never a good sign. It's followed by several paragraphs, the first of which states: "Copy A of this form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. The official printed version of Copy A of this IRS form is scannable, but the online version of it, printed from this website, is not. Do not print and file copy A downloaded from this website; a penalty may be imposed for filing with the IRS information return forms that cant be scanned. See part O in the current General Instructions for Certain Information Returns, available at http://www.irs.gov/form1099, for more information about penalties."

If you understood this last paragraph, please let me know so I can put you up for a MacArthur Genius Grant. In the meantime, in July 2019, the IRS sent out over 10,000 letters telling recipients that they owed back taxes, interest, and penalties on their cryptocurrency transactions and that they needed to file amended returns. The IRS also lets recipients of the letters know that they could possibly face criminal prosecution and fines of up to $250,000.

In case you think dabbling in cryptocurrency sounds too complicated, consider this: on March 20, 2020, the value of Bitcoin rose 23% in just 24 hours, reaching $6,172.61.

Read more from the original source:
The IRS Wants to Know About Your Cryptocurrency Transactions - Interesting Engineering

The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. To wit, the iMining Blockchain and Cryptocurrency Inc. (CVE:IMIN) share price is 56% higher than it was a year ago, much better than the market decline of around 14% (not including dividends) in the same period. So that should have shareholders smiling. In contrast, the longer term returns are negative, since the share price is 33% lower than it was three years ago.

See our latest analysis for iMining Blockchain and Cryptocurrency

iMining Blockchain and Cryptocurrency didnt have any revenue in the last year, so its fair to say it doesnt yet have a proven product (or at least not one people are paying for). So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. Investors will be hoping that iMining Blockchain and Cryptocurrency can make progress and gain better traction for the business, before it runs low on cash.

Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress and share price will dictate how dilutive that is to current holders. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). iMining Blockchain and Cryptocurrency has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.

iMining Blockchain and Cryptocurrency had liabilities exceeding cash by CA$236k when it last reported in February 2020, according to our data. That makes it extremely high risk, in our view. So were surprised to see the stock up 122% in the last year , but were happy for holders. Its clear more than a few people believe in the potential. The image below shows how iMining Blockchain and Cryptocurrencys balance sheet has changed over time; if you want to see the precise values, simply click on the image.

In reality its hard to have much certainty when valuing a business that has neither revenue or profit. One thing you can do is check if company insiders are buying shares. Its usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).

Its nice to see that iMining Blockchain and Cryptocurrency shareholders have received a total shareholder return of 56% over the last year. Theres no doubt those recent returns are much better than the TSR loss of 1.4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. Its always interesting to track share price performance over the longer term. But to understand iMining Blockchain and Cryptocurrency better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. Weve identified 6 warning signs with iMining Blockchain and Cryptocurrency (at least 4 which are potentially serious) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

Originally posted here:
Investors Who Bought iMining Blockchain and Cryptocurrency (CVE:IMIN) Shares A Year Ago Are Now Up 56% - Simply Wall St

The price of BTC/USD has gone up from$9,806.63 to $9,848.50. There is a dip in the RSI, but it is still trending within the overbought zone at 79.63. While this ideally means an upcoming short term bearish correction, we believe that the bulls will continue to consolidate till Tuesdays halving.

The MACD indicates increasing bullish momentum. Ideally, the bulls will want to conquer resistance levels at 10,036 and $10,359.55. On the downside, healthy support lies at $9,500 and $8,780, which must be defended on the face of a sudden bearish onslaught.

ETH/USD is consolidating below the $218 resistance level as it went up from $211.50 to $213.20 in the early hours of Saturday. The price is hovering below the red Ichimoku cloud. The bulls gain enough firepower to enter the cloud by conquering the $227.40 resistance level. On the downside, there are healthy support levels at $207.25 and $198.

The SMA 50 is looking to crossover the SMA 200 to potentially chart the highly bullish golden cross pattern. The MACD shows slightly bearish market momentum.

XRP/USD bulls remained in control for the third straight day as the price went up a bit from $0.2187 to $0.219, trending above the triangle formation in the process. The bulls must garner enough momentum to beat resistance at SMA 200, $0.2284 and $0.2362. The last resistance level will bring the price above the 20-day Bollinger Band.

On the downside, the buyers must make sure that support at $0.2113 and $0.1962 remain strong. The Elliott Oscillator has fallen from 0.026 to0.0163 over the last seven days.

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Cryptocurrency Market Update: Bitcoin, Ethereum and Ripple have a bullish start to Saturday, following Fridays drop - FXStreet

Hong Kong-based cryptocurrency platform Crypto.com announced on Monday it has secured a $100 million direct insurance policy led by Arch Underwriting at Lloyds Syndicate 2012. The platform reported that this is the largest coverage that Crypto.com has secured for its cold storage assets on custodial partner Ledger Vault.

According to Crypto.com, the new policy brings its total cryptocurrency insurance to $360M, including direct and indirect coverage through custodians. Crypto.com also claimed that the policy will significantly expand security protection for its rapidly growing user base against physical damage or destruction, and third-party theft. Speaking about the new insurance policy, Kris Marszalek, Co-Founder and CEO of Crypto.com, stated:

We have committed deeply to the security of our platform, a top concern shared by early adopters and those new to crypto. This additional insurance policy from Lloyds, coupled with our previous large policy and ongoing proactive Defense in Depth approach, provides another layer of protection for our users.

The insurance policy follows Crypto.com recent announcement that its platform has reached two million users, a key milestone achieved just six months after the platform hit its one million user mark.

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Hong Kong Cryptocurrency Platform Crypto.com Announces New $100 Million Insurance Policy Led By Arch Underwriting That Extends Total Coverage to $360...