Category Archives: Etheruem

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College Student Faces $400K IRS Debt After Crypto Bull Run

A student took to Reddit recently asking for advice on how to handle an IRS tax debt of $400K after his crypto investments had bumped and dived.

The young Californian, preferring to remain anonymous, profited like many from investments made towards the end of 2017 when his $5K stake in altcoins brought him a massive return of $880K.

His laptop gamble with Coinbase certainly paid off, but then came the payback after his portfolio sunk to a $125k in the new year. “They really never do teach this stuff” he posted on Reddit when asked if he’d set something by for tax.

The student claimed he’d been trading crypto-to-crypto and that Coinbase didn’t, “ever cash out to fiat and transfer any USD into my bank accounts from these tradings.” Nonetheless, he appears to have convinced himself the IRS is coming calling after receiving a standard Coinbase 1099K form (https://i.imgur.com/1TZuh2B.jpg) warning him that the information regarding his transactions would be forwarded to the Inland Revenue.

It appears he received little sympathy from Reddit users from comments such as, get “a tax professional and stop wasting time trying to get free advice,” to, somewhat philosophical, advice from one user who suggested that his problem “not be a high point in your life, but you will get through it.”

More useful advice suggested that he stay clear of “questionable accounting methods” and get an accountant to work out a suitable tax repayment method -although re-payments to the IRS to the tune of $400k may just impact on his $12/h part-time-job whilst getting through college.

A recent Twitter poll which quizzed US cryptocurrency investors about their tax scenarios revealed that 9% of the 9,339 respondents claimed that they had “already filed and paid,” with 53% far more adventurous claiming, “they’ll never catch me.”

It looks like more clarification is needed regarding paying these kinds of taxes in the US. The IRS Advisory Committee has just requested help in dealing with cryptocurrency taxation in a bid to ease its current $25 billion tax liability. The request for more clarity has come after the IRS published its findings from a report which  highlights the current confusion surrounding how to address taxation on cryptocurrency assets in the United States

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$15 Billion Shed in Two Hours in Bitcoin, Crypto Markets Overnight Flash Crash

Over Saturday night on 10 June, Bitcoin and crypto markets dipped significantly, with Bitcoin shedding USD 300 in just over an hour, writes Inside Bitcoins.

The sideways market which has endured for some weeks finally came to an end when the mini-crash wiped out USD 15 billion off cryptocurrencies in a couple of hours.

The current scenario is that if Bitcoin slides, other cryptocurrencies tend to follow and this downward charge was again led by the major digital currency which has lost over 4.5% since its sudden drop in value in less than 24 hours. At the time of writing, other markets are falling with EOS, IOTA, Ontology, OmiseGo and Icon having had a particularly restless few hours.

The markets slid over 6% over the past day, creating a rush selloff. Currently, at a total capitalization of USD 324 billion, markets have fallen fast from yesterday’s level of USD 345 billion. At the time of press, Bitcoin is selling at USD 7,324 as indicated my CoinMarketCap.

Ethereum went with BTC and slid 5%, losing USD 25 in two hours, dropping to a new weekly low of USD 576 at time of writing. Previous to that, the currency had been hovering between USD 580 and USD 620 for over a week.

There is speculation that there may be two significant factors precipitating such rapid downward movement in crypto markets. Some pundits are pointing towards the news of yesterday’s announcement by the US Commodity Futures Trading Commission that they are investigating three major cryptocurrency exchanges: Coinbase, Kraken, and Bitstamp, along with others.

Others point to emerging news that South Korean crypto exchange CoinRail has been hacked, although the exchange is just ranked 90th in the world with a USD 2.6 million daily trading volume.

The biggest fall in the market’s top 10 has been IOTA, losing almost 12% on the day with USD 600 million wiped off its market cap, falling from USD 4.8 billion to USD 4.2 billion in a few hours.

Despite this slump, many analysts see this drop as insignificant. The 24-hour trading volume in January saw Bitcoin experience a trading volume of USD 17 billion in a day. Yesterday’s Bitcoin trading volume was a mere USD 4 billion, reports AMB crypto.

With market prices still in the follow-Bitcoin trend, a fundamental turnaround in market fortunes is reliant on Bitcoin’s performance over the following weeks.

 

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