When you think of all the cool issues surrounding crypto, what’s the very last thing you want to talk about? Decentralization? Censorship-resistance? Going to the moon? Buying the lambo? All those are great. But when it comes to cryptocurrency taxes, people go running for cover.
But burying your head in the sand isn’t smart. It’s essential that you understand how to manage your crypto gains and losses properly. We’re now in the thick of tax season and today we welcome Clinton Donnelly, the Crypto Tax Fixer to the show. Clinton is a Certified Public Accountant who claims to be on the cutting edge of crypto tax law.
Then, we’ll introduce you to a crypto tax tool designed to make the tracking of your trades easy to manage. Pat Larsen developed ZenLedger to provide the world’s leading tax and accounting software for cryptocurrency investments, trading, and fund operations.
This is going to be a very taxing episode. Get it? Taxing? We promise to make it fun because a spoonful of sugar helps the medicine go down. And IRS agents are allergic to sugar. At least that’s what I read on Twitter.
It’s episode #374 of The Bad Crypto Podcast.
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Feature: Clinton Donnelly
Founder of Donnelly Tax Law, Clinton Donnelly solves complex US tax problems for Americans Abroad, with assets abroad and crypto traders.
With clients in 48 countries, he’s prepared over 600 tax amnesty returns. In 2019, he represented 97 clients before the IRS recovering over $600,000 of taxes owed or claimed by the IRS. Clinton is also a conference speaker and author of several ebooks about US ex-pat and crypto taxes.
For crypto traders, he goes beyond preparing a return to anticipating how the IRS will select returns to examine. He includes the anti-money laundering reports and other advanced techniques to avoid audits and examinations.
CryptoTaxAudit (CryptoTaxAudit.com) is an annual subscription service that provides audit defense for taxpayers. It is specially designed for the needs of crypto owners. If you receive an IRS letter about how you reported your crypto transactions, you need crypto tax law experts fast. Your subscription is like an insurance policy protecting you from the huge expense of defending yourself.
In addition, subscribers get access to detailed instructions for preparing a great crypto tax return and submitting the required anti-money laundering forms. These instructions, prepared by experts, can save you thousands of dollars in accountant fees. Visit CryptoTaxAudit.com to start defending yourself today.
CryptoTaxAudit is the only tax audit defense service designed for crypto owners.
Visit CryptoTaxAudit.com to start defending yourself today.
Twitter — @CryptoTaxFixer
Donnellytaxlaw.com for a personal consultation
CryptoTaxAudit.com for audit protection and do-it-yourself return instructions
Feature: Pat Larsen, Zenledger
Pat graduated from the U.S. Air Force Academy. As a mission commander for the U.S. Navy, he commanded search & rescue and combat medical evacuation missions on two combat tours. He then got his MBA from The University of Chicago Booth School of Business and proceeded with his career as an Amazon business manager and M&A investment banker. In 2017 he started ZenLedger with a passion to develop the world’s leading tax and accounting software for cryptocurrency investments, trading, and fund operations.
Extensive experience leading cross-functional teams in dynamic environments. Using data analytics to guide business, marketing, and tech/design decisions. B2B/B2C marketing and business development for e-commerce and cloud-based software services (saas).
- Blockchain and Cryptocurrency startups, business applications, ICO’s, account & tax advisory in crypto
- Passionate about STEM and Art education (STEAM)
- Military veteran- search & rescue helicopter pilot.
- Recent successes building up a new e-commerce business service and developing a saas digital marketing tool.
Connect with Pat on LinkedIn
This episode is sponsored by: ZENLEDGER
ZenLedger is a SAAS company providing the best tax software for cryptocurrency investors. The idea behind ZenLedger is very simple: paying taxes is hard, and we make it easy. We help individual cryptocurrency investors and CPAs with their cryptocurrency accounting and tax returns. Cryptocurrency traders do a lot of trades across multiple exchanges, and it becomes very difficult to do the proper accounting and keep track of all your capital gains or capital losses. We help bringing all this data together and make paying cryptocurrency taxes an easy and seamless experience.
Badco.in/ZenLedger -- 15% discount with BADCRYPTO15
This just in. The hosts of this show are not financial advisors. We’re just not. No matter how we wish we were. It ain’t gonna happen.
That’s why it’s good fortune that we’ve happened up Tim Picciott. He’s a living breathing financial advisor who specializes in the crypto space. What are the odds?
Today Tim joins us to share his thoughts on crypto investing. Listen to him. Don’t listen to us. Well listen to us when we are asking questions or cracking jokes. But that’s all.
We’re pleased to welcome a real financial advisor to the show for episode #346 of The Bad Crypto Podcast.
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This episode is sponsored by: MOBIE Money has existed for thousands of years progressing from shells to precious metals and minted coins to paper money. But the transfer of modern money is slow and expensive for both merchants and consumers — particularly across borders. Now payments are going mobile. That’s why the MobiePay™ ecosystem consists of three core applications that let users spend or send money and digital currency worldwide from their mobile phone in seconds — even if they don’t have a bank account. Mobie supports cashback programs on purchases with MobieCoin™ as an integrated reward and payment token connecting all fiat & major cryptocurrencies directly to the global retail marketplace — so everyone in the Mobie™ ecosystem is part of the world's most rewarding loyalty program. Mobiepay.io
Feature: Tim Picciott
Crypto Wealth Advisor (Financial Advisor)
TITLES: President Crypto Self-Direct
Wealth Advisor, Innovative Advisory Group
Credentials: CERTIFIED FINANCIAL PLANNER ™ CHARTERED RETIREMENT PLANNING COUNSELOR ™
Timothy Picciott CFP® CRPC® is a Wealth Advisor with Innovative Advisory Group.
He is also a trailblazer in the field of Crypto wealth management strategies. Early on Tim understood the challenges Bitcoin early adopters faced, as they struggled to get their substantial cryptocurrency gains from the virtual world to the real world… without getting killed by taxes.
Tim works with Bitcoin and Crypto early adopters to provide advanced financial planning solutions to help them pay as little taxes as legally possible on their highly appreciated asset(s). He also advises crypto-enthusiasts as to how they can invest into
“Crypto IRAs” using self-directed IRA’s and 401(K)’s.
Tim’s contrarian viewpoints and handle of Austrian Economics makes him an incredible asset for those who aren’t looking for cookie-cutter financial advice. Tim has been helping his clients retire with the feeling of security for over a decade.
FEATURED ON: Tim has been featured on: Bitcoin.com, “Free Talk Live”(2x feat guest), “Declare your Independence”(Frequent Guest 50+ times), Anarchast, Finance and Markets, CEO Money, The Money Savage podcast, Crypto Coin Show, Tatiana Show as well as many other media appearances including his own podcasts: “The Liberty Advisor Show” and “Crypto Wealth Show”
Taxes are becoming more of a priority as cryptocurrency goes mainstream. Bittax founder, Gidi Bar-Zakay and vice president, Or Lokay Cohen, explain how cryptocurrency holders should treat taxes. Moreover, the duo goes into detail as to how cryptocurrency taxes are bridging the gap between regulators and crypto holders.
Gidi Bar-Zakay, Bittax Founder & CEO
CPA and legal expert, formerly deputy director of the Israel Tax Authority. Gidi is a Director of the Israel CPA Association and Founder of a boutique firm specializing in tax agreements with the Tax Authority. Involved in cryptocurrencies since 2016, Gidi believes that its entry into the financial space is inevitable and provides the knowledge and the regulatory experience that becomes a necessity at the infrastructure level.
Lokay Cohen is vice president at Bittax, crypto tax calculation platform. Or has ten years’ experience with regulation, managing a leading tax consultant firm. She holds an LLM law degree, a BA in communications, and an MA in management and public policy. Through her work at Bittax, Or promotes the goal of bridging between the cryptocurrency to the taxation reality to enable tax reporting under a clear regulatory framework and specific identification method practice.
Guest Blogger: Andrew Rossow
The obscurity of cryptocurrencies has led to many misperceptions about the underlying technology and the broader market for digital assets. As the cryptocurrency sphere continues to mature and develop, one of the prominent narratives taking shape is expanding the scope of payment options, services, and resources for digital assets.
In particular, the actualizing of integrated financial service platforms, tax services integrating with digital assets, and the proliferation of payment avenues using cryptocurrencies. What was once a fringe market is continually merging further into the purview of the mainstream and legacy financial institutions.
Entrepreneurs and small businesses are afforded the opportunity to join the growing market now more than ever. Whether your online e-commerce business is looking to expand your payment options or you are simply looking to expose your business to a novel class of assets and their advantages, understanding some of the ongoing trends can help you penetrate a market full of innovation.
Integrating Digital Assets With Financial Institutions
Parallel to the escalating progression towards open financial protocols such as MakerDAO and Gnosis, companies and open-source projects are jostling for position to gain favor with financial institutions. The looming entrance of financial institutions such as mutual funds, pensions, and financial firms into the digital asset sector has sparked a migration of hybrid financial services into the blockchain ecosystem.
Competition for custodial services, largely viewed as one of the major services institutions are seeking, is ramping up as cold storage wallet custodians look to partner with trading platforms to cater to institutional needs. For example, companies like Formosa Financial endeavor to spur innovation at the convergence of blockchains and finance by providing a comprehensive environment that incorporates a suite of custodial, brokerage, and treasury/risk management services.
Formosa provides a conducive environment for startups in the digital asset sector to access financial services that commercial banks and other traditional services are not willing to offer small businesses in the novel market of cryptocurrencies.
Other projects like Morpher take a more direct approach in intermediating the connection between conventional finance and digital assets. Rather than integrating financial instruments and service providers with blockchains, Morpher ‘virtualizes’ the trading and investment experience. Their platform relies on using an Ethereum ERC-20 token to mirror the price movements of real assets like stocks, bonds, and derivatives.
Instead of directly controlling the asset, Morpher leverages smart contracts to ‘mint’ and ‘burn’ tokens that correlate precisely to asset movements. The concept is to democratize access to investment and trading more fluidly than dealing with the convoluted trading experience polluted with fees and third-party service providers of today.
Crypto Tax Services
A prevailing misperception of cryptocurrencies is that they are illegitimate or not subject to taxes, and therefore, do not constitute legitimate mediums of value. Despite a much more obscure nature in its early stages, Bitcoin and other prominent cryptocurrencies are rapidly garnering more regulatory attention and defined tax guidelines.
For example, the IRS has made its position on cryptocurrencies, particularly Bitcoin, distinct as a form of property — subject to capital gains/losses as other capital assets. Additionally, any income received directly via Bitcoin or ‘virtual currency’ (i.e., goods/services or mining) is considered an income that needs to be converted to USD and reported accurately.
Exchanges like Coinbase even offer a tax resource center to help their users with the upcoming tax filing deadline. More ambitious initiatives, such as ZenLedger, provide a software service for the aggregation, importation, and filtration of cryptocurrency transactions and trades into proprietary tax software. The necessary tax documents are filled with the user’s cryptocurrency transaction information and prepared for a CPA to file them conveniently.
ZenLedger is even integrated with TurboTax enabling users to easily import their crypto tax documents into the most popular tax filing product.
For small businesses, tools like ZenLedger and the emerging set of CPAs willing to assist in cryptocurrency tax filing is a much-needed reprieve from a once complicated and uncertain process. If you’re hesitant to accept crypto payments for your business due to tax implications, the set of resources at your disposal to alleviate any concerns have never been more abundant.
Emerging Payment Avenues
One of the central aims of furthering the adoption of cryptocurrencies is merchant acceptance and the growth of payment avenues using cryptocurrencies. The barrier for online merchant and brick-and-mortar stores accepting cryptocurrencies was previously high, with few options to make the experience more user-friendly for businesses.
However, diversified payment avenues are some of the most compelling recent developments in cryptocurrencies. Self-hosted, open-source processor BTCPay Server has plugin support for some of the largest e-commerce platforms in the world including WooCommerce, Magneto, and Drupal. Users can integrate Bitcoin and altcoin payments directly into their WordPress site within a few clicks and immediately begin accepting cryptocurrencies with no fees.
Projects like BitRefill even enable users to pay bills with cryptocurrencies by leveraging various gift cards for retailers such as Amazon and Apple’s App Store.
Bitcoin’s Lightning Network (LN), although still experimental, is rapidly making strides as a viable digital payment method for the web. Simple web extension payment tools using Bitcoin’s LN like Joule and Casa make immediate, no fee LN payments much more attuned to mainstream partialities in online payments.
Accepting payments via cryptocurrencies does not have to be mutually exclusive with conventional payment rails either. Merchants and small businesses seeking better exposure to a niche audience can just add something like BTCPay Server support to provide another method for accepting payments. Core cryptocurrency proponents are excited about the growth of the technology, and many times are willing to support businesses who expand their payment horizons to the young technology.
The stage of development for cryptocurrencies is assuredly still very early. However, the pace of innovation is quickly extending the scope of their integration with financial services and resources common in legacy financial structures. For entrepreneurs, the opportunity is ripe to become part of a growing community and access the benefits of consolidated financial services and digital assets.
Andrew L. Rossow is a millennial attorney, law professor, entrepreneur, writer, and speaker on privacy, cybersecurity, A.I., AR/VR, blockchain, and digital monies. He has written for many outlets, most notably Forbes and HuffPost
Connect with Andrew on LinkedIn
It’s the most horrible time of the year. Time to get off your asses and calculate taxes cause taxman is near. It should be the IRS that you fear.
Yes, blockchain buddies and crypto comrades, it’s time to start thinking about how to manage your crypto gains and losses from last year. And to help us sort through it all, we’ve got blockchain EA Drew Kernosky along for the ride. We’ll discuss crypto tax basics, loss harvesting, ICO taxation, tools to help you do the math and how to not go to prison.
So much fun you’ll be singing holiday tax songs along with us on episode #229 of The Bad Crypto Podcast.
CoinPayments.net was founded in 2013 as the first altcoin payment processor & has since grown to support payments for bitcoin & over 1,100 altcoins for their userbase of over 2.3 million business and user accounts across 182 countries.
The easy to use platform offers prebuilt plugins & integrations for all the major ecommerce platforms, including Shopify, Woocommerce & Magento.
Hosted wallets, conversion & fiat settlement functionality, CoinPayments leads the way in furthering the adoption of cryptocurrencies.
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FEATURE: Crypto Taxes
Archer Tax Group is one of the leading voices in tax planning surrounding crypto currencies. We specialize in tax mitigation, planning for ICOs/STOs, and business integration of cryptocurrency or blockchain. Archer Tax Group has advised many individuals both foreign and domestic along with helping ICOs plan their tax strategy across internal borders.
Drew Kernosky LinkedIn: https://www.linkedin.com/in/andrew-kernosky-ea-994a3a1b/
Cryptocurrency tax professional, helping taxpayers understand their tax liabilities in trading, mining, lending, and how to navigate the tax side of launching via ICO.