A place for redditors to discuss quantitative trading, statistical methods, econometrics, programming, implementation, automated strategies, and bounce ideas off each other for constructive criticism. Feel free to submit papers/links of things you find interesting.
Is there a crypto tax software that tells you in real time whether a trade will be taxed at short or long term capital gains?
Is there a crypto tax software that tells you in real time whether a trade will be taxed at short or long term capital gains? This plays a huge factor in whether or not a trade is worth it, especially since buying an alt with btc counts as selling btc, but with my current software I don't find out until when I do my taxes.
I have one crypto trade for 2019 but crypto tax software says I have none. Help!
Hello, I have one trade for 2019 that happened on January 1st at 12:09am eastern time for $30.88. I have put my trade history from all of the exchanges I have ever used into Cryptotrader.tax as well as Bitcoin.tax and they both say that I have no trades for 2019. Obviously I know this is not the case since I have one trade recorded for last year. And I know that no matter how small the trade, you have to report it to the IRS. So my question is this: how do I report this trade if no crypto tax software will record it as a valid trade for the 2019 calendar year? Is there something I'm missing? Any help is greatly appreciated. Thanks!
One option that I have is "Group Trades by Day . . . Use this setting to greatly reduce the number of items in your tax report." Is this permitted? I wouldn't think so, but on the other hand I also wouldn't think they'd put it as an option if it was not permitted. Turning it on reduces the number of trades from 1197 to 971, and reduces the gain by approx 5%. The software is cointracking.io. I can't imagine what the robo traders' returns look like...they could end up with returns that are thousands of pages long.
Deep Dive on the first Reddit Points, $DONUT Token 🍩 🍩 🍩Very Attractive, Low-Cap Opportunity 💎
DONUT TOKEN 🍩 🍩 🍩
$DONUT is an ERC20 token initially built at the behest of Reddit to trial out their Community Points initiative. Reddit is now scaling this up big time with the Reddit Scaling Bake-off. Once the winner is announced, DONUT will get some nice airtime. It has so far remained under the radar.
$DONUT has 3 core utilities; 1) used to purchase banner space in the 230,000+ member subreddit (this is a very attractive place to promote). DONUT used on the banner space is burned, marking the deflationary aspect of the tokenomics. 2) new tokens are issued on a periodic basis which is sent to active users of the community (they can HODL or sell to the continuous stream of advertisers). 3) DONUT holders can vote on proposals such as issuance reduction in the integrated AragonDAO, i.e. fully decentralised and community-run.
$DONUT has remained under the radar since launching on main-net. This is similar to many projects where the ecosystem and product are great but simply isn’t commercially focussed i.e. no business development or marketing team. In other words, it is purely community-run (and the community is starting to push it). We’ve also been in a bear market where many have kept their capital in ETH, BTC or other tokens. In the last 4 weeks, as predicted some time ago, DONUT is now seeing some serious interest in what I believe is the beginning of an interesting journey. Marketcap broke $800,000, price reached ATH of $0.01, volume/liquidity on Uniswap broke $100,000. This is still very early days for a token which has real utility in an ecosystem that will inevitably see a lot of traction during the bull market. Imagine holding a lot of DONUT now, and being the guy to sell to the flock of advertisers during the bull market?
Following this last point, there is a positive feedback loop to consider. The more users hear about DONUT, the more they will join the sub, the more they join the sub, the more valuable the banner is, the more valuable the banner is, the higher the price of DONUT, the higher the price of DONUT the more of deflationary it becomes (due to the burn-rate surpassing issuance-rate).
How likely is it more people will hear about DONUT? Well, right now some of Ethtrader’s most active users are earning about $3000 per month in DONUT. Can you imagine the headlines and media attention? “Ethtrader users earn $XXX in DONUT."
There is also the meme-coin element to factor in. I don’t like mentioning this because DONUT has actual use-case and is not a meme-coin in the traditional sense. But, let’s be honest, meme-ability / marketability are both very important. Dogecoin got to where it did with zero utility.
I am not saying that Reddit will roll out DONUT across their entire site. DONUT will be just for Ethtrader. Other subs can have their own token and use their own tokenomics. There are some examples already, like MOON & BRICK. Neither of these has tokenomics close to as attractive as DONUT and at the moment, there is no reason for them to accrue in value.
Fun fact,@cslarson(head moderator of ethtrader and founder of DONUTS as far as I can tell) was actually hacking on SourceCred before DONUTS happened. He, along with@lkngtnand@jvlusohad recently coded upcredaoat a hackathon, a project that mints ERC-20 tokens in an Aragon DAO according to Cred scores, when he got the call from Reddit offering support for prototyping DONUTS on ethtrader. Can’t blame him:) ... 👇👇👇
Funnily enough, this is actually an alpha: right now you can ‘farm DONUT’ by contributing to ethtrader through high-quality memes, discussions, comments etc. Just by being an active member of the community, you can earn DONUT 🍩 tokens which you can sell for real $ETH. I’ll explain later why people would want to buy DONUT. Or, you can HODL them, which is highly recommended. Based on the last rewards distribution (https://www.reddit.com/ethtradecomments/i48u9g/new_donuts_distribution/) if you earned a mere 100 or so Karma points in the sub, you would have received 10,000 DONUT tokens which you can then sell for ETH on a growing list of exchanges, namely Uniswap (which has growing liquidity). This is an example of what DeFi and Ethereum are all about and is one of the more significant community-focused projects. You have all sorts of crummy community tokens out there but none have the ecosystem to back them up. Don’t get me wrong, I’m not saying DONUT is a $LEND, $COMP, etc but it ticks all the boxes to be considered a moon-shot: meme-worthy, existing network effect, undeniable utility, Reddit-backing, AragonDAO support, and more. ... The Ethtrader Group is a 100% community-run subreddit-collective where the governance token DONUT 🍩is used to vote on proposals regarding tokenomics. Slashing supply, changing tokenomics and other decisions can be made in their AragonDAO with the more DONUT 🍩 you hold resulting in higher voting power. It makes sense that Aragon was used seeing as the lead developer Carlson was working on Credao (a similar concept) using Aragon before he was approached by Reddit to work on the very first iteration of their Community Points system before rolling it out across the entire platform. Source. Any member of the community can propose changes by first gauging sentiment through polls in the subreddit (something you need DONUT for by the way), following up with proposals in AragonDAO which require voting (again voting power is tied to DONUT holdings). ... Growth over time: DONUT 🍩 has thus far followed similar growth trajectories of projects that start out organic, community and product-focused and over time attract real interest, real activity and real growth. This is in opposition to projects that market first and deliver later. DONUT hasn’t marketed anything as the community has focussed internally during the bear market and the ecosystem is relatively new, which is why it isn’t already worth more. I have been trading crypto since 2011 and ALTs since 2014 and I’ve learned to spot these nuanced differences between projects, and the all-important signals. The DONUT token launched in its current state in Jan 2019 with a volume of $30 and a price of $0.0019. But I am going to focus on December 2019 as the start date for a number of reasons: first, due to some teething pains with the direction of Ethtrader & $DONUT some of the team split off, the Token also underwent a shift and you can see on the chart this early phase does not reflect any organic price action. So, starting from the latter date, looking at the chart, you can see an organic price development typical of many promising projects. Slow, steady accumulation, followed by sharper ups and downs with the bottoms rising upwards. I saw this same pattern on pretty much every organic-driven ALT I’ve invested in with success. In the last 2 weeks, ATHs have been broken across the board. ... Similar successes: Let’s face it. In our funky community, tokens of all kinds can grow astronomically. Even those without a single use-case can grow simply because they are meme-worthy. Think $DogeCoin or $Garlicoin. More recently you have $TEND which is growing in popularity and is currently worth $1 (when I first started writing this post, it was at $0.50. DONUT was at $0.005 and is now touching $0.01). DONUT 🍩 is unique in that it has potential to be a significant Ethereum meme token on par with these examples but more importantly, it also has tangible use-cases which will ensure the project remains active over a longer course of time, with accessibility open to anyone with spare time to meaningfully contribute to the community. But that isn’t the clincher. The Ethtrader group is large and getting larger with almost a quarter of a million members at the time of writing. That is a valuable audience of highly relevant people interested in cryptocurrency, especially Ethereum. DONUT 🍩is used in a Harbinger Tax style system (whereby someone would use DONUT to buy ad space from the current owner for a price set by that owner. This person would then set a new price — this will be the cost someone who wants it back will need to pay — and then based on this new price there will be a 100% daily tax for as long as you choose to hold the banner for). This adversarial system will ensure you have projects (typically with deep pockets) buying up lots of DONUT 🍩 to ensure they can control the banner, spending those DONUT tokens on getting the banner, and the process will continue over and over. If we enter a new bull market for DeFi, this will be a significant value and liquidity driver as let’s face it, that is prime real estate for brand exposure. I'll draw your attention back to the feedback loop I mentioned in the TL;DR.
📸IMAGE:https://imgur.com/a/CnFpfQr *note, this is just a quick thing I slapped together and shows just one process and one use-case and is not a comprehensive diagram. Hopefully, it is useful anyway. Deflationary or inflationary? The DONUT used to buy the banner is always burnt, currently, 3 Million DONUT is burned per month. While there is monthly issuance (the source of contribution rewards), there is also frequent burn events. Currently, the banner is burning 100,000 DONUT per day compared to the 4,000,000 issued per month. This daily burn can increase or decrease depending on the cost of the banner which can increase or decrease based on what the owner sets it as. This means when demand increases (exchanges, dapps, projects bid for the banner space), the burn rate will exceed the issuance rate, resulting in deflationary tokenomics. Conversely, if the cost of the banner decreases and is below the threshold (as it currently is, only slightly) then technically it will be inflationary. The deflationary dominance has already proven to be effective seeing as the token started out with 100m units and now on around 90m. Furthermore, the issuance rate can at anytime be slashed if put to a community vote which anyone in the community can initiate, so long as they own DONUT. So, DONUT is also used here as a governance token, the more you have the stronger your vote on such decisions. To use DONUT to vote on community initiatives or a change in the tokenomics, you’ll need to visit their integrated AragonDAO and learn more about the process. This can be found here: https://mainnet.aragon.org/#/0x57EBE61f5f8303AD944136b293C1836B3803b4c0 and is also where DONUT is claimed from.
Own DONUT now and be the one to sell it advertisers who will be in bidding wars with each other. Advertisers in this industry are used to ridiculous prices and the banner is very cheap at the moment.
The DONUT used for the ads will be burnt and the advertisers, of course, won’t get them back. This means a continuous BUY-pressure for DONUT.
As a DONUT holder, you will have voting power in their AragonDAO integration. What does this mean? We can submit proposals and vote on tokenomics to change, e.g. reduce supply.
We all know this space, right? On top of the concrete utility, DONUT could and will become a popular ‘meme-coin’. Previous examples of these (that lack utility) are Dogecoin & GarlicCoin.
If you were an exchange, would you pay $3k per day to reach all the ETH traders? (They currently spend so much more than that on useless CMC banners) If so, that’s $1m per year. For example, you’ve all seen the endless crypto . com banners right? They spend millions on marketing. I will wager all my DONUT that they will be serious bidders soon.
Some people are already earning $3000 a month on Ethtrader via donut. You can take a look at the latest distribution list here.
Media attention is practically assured and the number of new people tweeting and talking about DONUT is rising rapidly, just take a look at twitter, 4chan, reddit and other places. DONUT was also listed on CoinGecko and CoinMarketCap within the last mont.
I hope this was in-depth and useful. I have tried to add as much as possible but I have no doubt missed some stuff as well. As always, DYOR and make an informed decision. For me, at this price, it's a no brainer.
Hello, I am a crypto trader who had a lot of trades on various platforms in 2019, and is now reconciling how to calculate all of these gains. I have bitcoin.tax but haven't touched it yet. If I imoort all of my trades correctly from these platforms will it be able to reconcile them all? I am not a tax cheat and want to do this correctly
Hello Guys, how is your day? It is nice to meet you. My name is Martin. This article is going to be a bit long. Prepare yourself. I would like to use the internet as a way how to be opened minded. I do believe, that I will find a few people who have a similar point of view about life. Let´s start. These books are the books which I have listened/read so far Robert Kiyosaki: Rich Dad Poor Dad Napoleon Hill: Think and Grow Rich Robert Cialdini: Psychology of Persuasion Dale Carnegie: How to Win Friends and Influence People Eric Reiss: Lean Startup Jason Fried and David Hansson: Rework Henry Hazlitt: Economics in One Lesson Mike Weinberg: New Sales Simplified Mike Weinberg: Sales Management Simplified Joe Girardi (I am using his previous surname because he had to change it due to business): How to Sell Anything to Anybody Chriss Voss with Tahl Raz: Never Split the Difference: Negotiating As If Your Life Depended On It Kevin Horsley: Unlimited Memory Daniel Kahneman: Thinking Fast and Slow Now I do hope, that you realized, that I am trying to improve if anyone has any book, which has value in the crypto sphere bring it here (or economy). I want to say, that I took my risk and I am comfortable with it. I know that the tax year is next year, however it is better to be prepared now. Let´s say that I am 23 years old. I don´t have commitments (expect bills and work) currently living in UK I realized, that I have two important dreams.
Be independent ( Don´t get me wrong I like to work and gain the money for initial investment, however, I would rather be doing long term investing/ day trading and be around my kid (in the future), than working long hours as a waiter plus I realized, that people talking to me differently when they have a higher position. I do agree, that humanity was raised in a hierarchy, therefore I want to get out of it as soon as possible.
Take care of my family and friends plus give the spare money back to the community (music festival, homeless people, donations, etc.
I made move-in crypto. I did some day trading 2-3 per day because I wanted to know if I can do it. Otherwise, I am thinking about it as long term ( I will go back to work when we open a restaurant). I did a few successful trades. Few not so much, but I waited and they become successful as well. I got lucky or fundamentals got lucky. I don´t know. I also realized, that for date trading I need more money. My road map is. a) Try to get as much as I can from this bull market b) Leave the job and become day trader I want to do everything legally, therefore here is the problem https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals https://koinly.io/ I have heard from other people who are using this software (on youtube) what are your thoughts? 1.) What if I am holding a Security token, which I have to convert to exchange token, therefore I will be paying capital gain tax or income tax? So far I know, that people converting to fiat money only Bitcoin. I might miss something. 2.) How do I pay tax, If I don´t want to change my tokens to Cryptocurrency? 3.) Is it better to trade as an individual or create a business? I know that this topic is complicated for many people therefore if my questions are hard to answer. Give me a shout and I will try to explain it. Is there anyone who could help me out or give me a link on a good accountant? ( I am going to ask at work our accountant about this topis) For me, this is serious problem. Obviously I want to pay as fewer taxes as I can because I will use this money for buying a house etc. therefore I will put the money back to the economy. On the other hand, I agree with paying taxes. So far I am doing well guys I have a 75 percent return on investment in 2 months. It can go to 0 even minus, but I do believe it can go even higher. Thank you for reading it so far! If you want I can get here more links of tax software providers. (I am curious how they are thinking about exchange, security and utility token). I hope, that I can post it here because it is a cryptocurrency group. I do like cryptocurrency. It consists of sociology, economy, international relationship etc. Thanks to everyone who read it so far. PS. I don´t want to promote anything. This is my life. I am real. Kind Regards Martin
What is the best solution for keeping up with tax information?
What is the best software, app, website for tracking your crypto trading for tax purposes? I am new to crypto trading. I want to make sure that I have everything I need completely and correctly at tax time. I have seen CoinTracking.info, that looks pretty good, but also a little expensive. I have seen Accointing.com, that looks pretty good, reasonably priced, but I think it may be new. What do you use, how well does it work for you and is it reasonably priced? ... thank you. ...
Name one thing you wish your favorite exchange/crypto trading platform had
My imaginary perfect exchange would have forex, stocks, altcoins, and CFD for all of these. I could also use built-in tax reporting software, but that's secondary. But I said one thing - and that would be trading stocks with crypto. What's the one thing you wish your exchange had?
With Bitcoin Suddenly Surging, Canaan Stock Is Also Going Up Today
[FULL ANALYSIS] Bitcoin exchanges and payment processors in Canada are now regulated as Money Service Businesses
Hello Bitcoiners! Many of you saw my tweet yesterday about the Bitcoin regulations in Canada. As usual, some journalists decided to write articles about my tweets without asking me for the full context :P Which means there has been a lot of misunderstanding. Particuarly, these regulations mean that we can lower the KYC requirements and no longer require ID documents or bank account connections! We can also increase the daily transaction limit from $3,000 per day to $10,000 per day for unverified accounts. The main difference is that we now have a $1,000 per-transaction limit (instead of per day) and we must report suspicious transactions. It's important to read about our reporting requirements, as it is the main difference since pretty much every exchange was doing KYC anyway. Hopefully you appreciate the transparency, and I'm available for questions! Cheers, Francis ********************************************* Text below is copied from: https://medium.com/bull-bitcoin/bitcoin-exchanges-and-payment-processors-in-canada-are-now-regulated-as-money-service-businesses-1ca820575511
Bitcoin is money, regulated like money
Notice to Canadian Bitcoin users
If you are the user of a Canadian Bitcoin company, be assured that:
These regulations only target virtual currency exchanges and virtual currency transmitters (e.g. payment processors, custodial wallets).
No action on your part is currently required. It is businesses that have to comply, not users.
You may notice that the exchange service you are using has change its transactions limits or is now requiring more information from you. You can stop reading this email now without any consequence! Otherwise, keep regarding if you are interested in my unique insights into this important topic!
Background on regulation
Today marks an important chapter for Bitcoin’s history in Canada: Bitcoin is officially regulated as money (virtual currency) under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of Canada (PCMLTFA), under the jurisdiction of the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC). This is the culmination of 5 years of effort by numerous Bitcoin Canadian advocates collaborating with the Ministry of Finance, Fintrac and other Canadian government agencies. It is important to note that there is no new Bitcoin law in Canada. In June of 2014, the Governor General of Canada (representing Her Majesty Queen Elizabeth II) gave royal asset to Bill C-31, voted by parliament under Stephen Harper’s Conservative government, which included amendments to the PCMLTFA to included Bitcoin companies (named “dealers in virtual currency”) as a category of Money Service Businesses. Thereafter, FINTRAC engaged in the process of defining what exactly is meant by “dealing in virtual currency” and what particular rules would apply to the businesses in this category. Much of our work was centred around excluding things like non-custodial wallets, nodes, mining and other activities that were not related exchange or payments processing. To give an idea, the other categories that apply to traditional fiat currency businesses are:
Foreign exchange dealing
Remitting or transmitting funds
Issuing or deeming money order or similar negotiable instruments
When we say that Bitcoin is now regulated, what we mean is that these questions have been settled, officially published, and that they are now legally binding. Businesses that are deemed to be “dealing in virtual currency” must register with FINTRAC as a money service business, just like they would if they were doing traditional currency exchange or payment processing. There is no “license” required, which means that you do not need the government’s approval before you can operate a Bitcoin exchange business. However, when you operate a Money Service Business, you must register and comply with the laws… otherwise you risk jail time and large fines.
What activities are regulated as Money Service Business activity?
A virtual currency exchange transaction is defined as: “an exchange, at the request of another person or entity, of virtual currency for funds, funds for virtual currency or one virtual currency for another.” This includes, but is not limited to:
Bitcoin trading platforms (orderbooks)
Bitcoin exchange platforms (fixed-rate)
Selling or buying Bitcoin OTC professionally
Crypto-to-crypto trading (orderbook, fixed-rate or OTC)
Notice to foreign Bitcoin companies with clients in Canada
Regardless of whether or not your business is based in Canada, you must register with FINTRAC as a Foreign Money Service Business, if:
You direct your MSB services at persons or entities in Canada
The regulation of Bitcoin exchange and payment services has always been inevitable. If we want Bitcoin to be considered as money, we must accept that it will be regulated like other monies. Our stance on the regulation issue has always been that Bitcoin exchanges and payment processors should be regulated like fiat currency exchanges and payment processors, no more, no less. This is the outcome we obtained. To comply with these regulations, we are implementing a few changes to our Know-Your-Customer requirement and transaction limits which may paradoxically make your experience using Bull Bitcoin and Bylls even more private and convenient!
The bad news
We are adding per-transaction limits in addition to daily volume limits.
The per-transaction limit for accounts with limited verification is $1,000 (previously $3000). To conduct transactions over $1,000 you must get your account verified.
We require users to provide their Date of Birth as a requirement to change their verification status to “Verified”.
We require users to provide their Occupation as a requirement to change their verification status to “Verified”.
The good news
We are increasing the daily volume limit from $3,000 to $10,000 for users that have the “limited” account verification status. Users with limited account verification can do multiple transactions as long as they are each below the $1,000 threshold and as long as they don’t exhibit suspicious behavior (see details below).
Identity documents will no longer be required for users that can be identified using their credit files. They will only be required where identification using credit file lookup was inconclusive. This change will take effect later this summer.
Connecting bank accounts to Bull Bitcoin using the flinks bank verification software will no longer be required for users that can be identified using their credit files. This will only be required where identification using credit file lookup was inconclusive. This change will take effect later this summer
The user’s KYC info (name, address, date of birth and occupation)
Suspicious transaction reporting
Satoshi Portal is required to make suspicious transactions report to FINTRAC after we have detected a fact that amounts to reasonable grounds to suspect that one of your transactions is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence. Failure by Satoshi Portal Inc. to report a suspicious transaction could lead to up to five years imprisonment, a fine of up to $2,000,000, or both, for its executives. We are not allowed to share with anyone other than FINTRAC, including our clients, the contents of a suspicious transaction report as well as the fact that a suspicious transaction report has been filed.
What is suspicious activity?
Note forbitcoinca: this section applies ONLY to Bull Bitcoin. Most exchanges have much stricter interpretation of what is suspicious. You should operate under the assumption that using Coinjoin or TOR will get you flagged at some other exchanges even though it's okay for Bull Bitcoin. That is simply because we have a more sophisticated understanding of privacy best practices. Identifying suspicious behavior is heavily dependent on the context of each transaction. We understand and take into account that for many of our customers, privacy and libertarian beliefs are of the utmost importance, and that some users may not know that the behavior they are engaging in is suspicious. When we are concerned or confused about the behaviors of our users, we endeavour to discuss it with them before jumping to conclusions. In general, here are a few tips:
Don’t provide false of misleading information. We will know right away if your date of birth, address and name don’t match.
Don’t try to exploit loopholes in the KYC process.
Don’t transact on behalf of someone else without telling us.
Be cooperative with customer support.
Here are some examples of behavior that we do not consider suspicious:
Coinjoin or other Bitcoin privacy techniques.
Using VPNs, TOR or VOIP phones.
Asking questions about, or criticizing, our privacy policies.
Talking negatively about banks or government.
Here are some example indicators of behavior that would lead us to investigate whether or not a transaction is suspicious:
Making statements about being involved with criminal activity.
Saying you don’t want the government to know about your transactions.
Asking advice about concealing source of funds or tax avoidance.
Funding your account from a bank account that is not in your name.
Conducting transactions on behalf of someone else without telling us.
Trying to falsify your identity or impersonating someone else.
Making multiple bill payments to the same recipient, or multiple Bitcoin purchases, in a way which seems structured specifically to avoid the $1,000 transaction amount KYC threshold.
Continuing to perform transactions that are unnecessarily complex, inefficient and not cost-effective after having been advised otherwise by our staff.
What does this mean for Bitcoin?
It was always standard practice for Bitcoin companies to operate under the assumption they would eventually be regulated and adopt policies and procedures as if they were already regulated. The same practices used for legal KYC were already commonplace to mitigate fraud (chargebacks). In addition, law enforcement and other government agencies in Canada were already issuing subpoenas and information requests to Bitcoin companies to obtain the information of users that were under investigation. We suspect that cash-based Bitcoin exchanges, whether Bitcoin ATMs, physical Bitcoin exchanges or Peer-to-Peer trading, will be the most affected since they will no longer be able to operate without KYC and the absence of KYC was the primary feature that allowed them to justify charging such high fees and exchange rate premiums. One thing is certain, as of today, there is no ambiguity whatsoever that Bitcoin is 100% legal and regulated in Canada!
Posting with a throwaway for privacy reasons. I am a crypto OG since 2011 with a very bad memory and I believe I'm about to be audited. Is there any service that can help me back-trace all my transactions and prepare myself for whatever I'm in for? Especially something that could help me remember any exchanges I've used in the past? I'm the kind of guy who will go to sign up for an account on some cool-looking new crypto-service only to find that not only do I already have an account there, but there are like 10btc just sitting there for years (no joke this has happened to me several times) I'm terrified I will accidentally perjure myself. I know the IRS is using chain analysis to get information on tax payers, but what can I use to ensure I am staying compliant?
I used affiliate marketing to generate over $10,000 to bootstrap my software startup
When my two partners and I started building our cryptocurrency tax software company, we had no money.
The three of us were fresh out of college and broke as can be. However, that didn’t stop us from chasing our business idea, and it shouldn’t stop you either. In order to fund the early stages of the company, we turned to affiliate marketing. Simply, we blogged about the top tools in our “cryptocurrency trading” niche and recommended our favorite products. We would then spread our blog posts across the internet with a simple content promotion strategy for interested readers to find. This simple and replicable approach got our blog posts ranked on Google and ultimately brought in thousands of dollars in affiliate commissions. This tactic helped us pay for the infrastructure and early costs of getting our software platform off of the ground. The process we used is dead simple. I explain below exactly how we did it.
Step 1: We identified popular products in our niche that had lucrative affiliate programs
For anyone new to the world of affiliate marketing, it simply works as such: you (the affiliate) promote/market a company’s products or services on the internet. For every product that you sell, you earn a commission. The first step we took in our affiliate marketing quest was identifying tangentially related products that overlapped with our target market. Since we were building a product that would automate the capital gains and losses tax calculations for cryptocurrency traders, it made sense to find affiliate programs for other products that cryptocurrency traders (our target market) were likely to use. Taking this approach meant that our blogging efforts would not only make us affiliate commissions and help fund our company, but they would also progress our own marketing efforts for CryptoTrader.Tax. People who read our affiliate blog articles would also come across our brand, sign up for our email lists, and possibly even sign up for our tax product. Other beneficial side effects to these types of blog posts included increasing the domain authority of our website (and thus our SEO “juice”), attracting backlinks, training our Facebook pixel, and serving as future collateral for future partnerships with these companies. The affiliate strategy would be a win-win-win. After doing a bunch of Google searching, YouTube research, and online reading about our niche, we identified some great products to promote. We started with crypto trading bots. Crypto trading bots automate certain trading strategies for crypto investors, and three years ago, they were becoming very popular. Additionally, many of the companies offering these types of bots to cryptocurrency traders had great affiliate programs. We signed up for each of the affiliate programs and started writing our blog posts.
Step 2: Write the content
This part was relatively straightforward. Once we had identified the products that we believed were the best, we tested them out and signed up for the affiliate programs. We then simply wrote blog posts discussing the pros and cons of each platform. The blog posts were extremely simple. People would read about the various trading bots discussed in the blog post, and when they clicked on one of the links to the bots we recommended, they actually clicked on our affiliate link. If they wound up making a purchase, we earned a commission. Here are links to a couple of the articles we wrote on crypto trading bots:
Once the articles were published and live on our site, we followed a simple content promotion strategy. We would share a link to the article in relevant cryptocurrency trading communities. Reddit was the best community for us. We would post our articles to subreddits like cryptocurrency, ethtrader, btcmarkets, and countless more to help spread the articles to interested readers. In addition to Reddit, we’d post in Facebook groups made up of crypto traders, repost the articles on Hackernoon, and tweet about them. This was the extent of our content promotion. It was super basic. However, it was just enough to get the posts seeded on the web. In a relatively short period of time, each of these articles started ranking for relevant keyword searches on Google such as “best crypto bots” etc., and this organic search traffic became our largest traffic source for these affiliate articles in the months to follow.
Step 4: Earn money
Bang bang – the posts were live and they were being distributed around the internet (mostly by Google). We then got to watch the money roll in. These simple affiliate articles generated thousands of dollars for us once they started ranking on Google for relevant keywords. This money covered a lot of our early hosting and company costs, and allowed us to stay scrappy while focusing on building CryptoTrader.Tax. We doubled down on this strategy by writing more and more affiliate articles reviewing other related cryptocurrency products to make more and more affiliate income. This one article we wrote on the best cryptocurrency charting tools single-handedly generated us over $6,000 in affiliate commissions (screenshot of our affiliate dashboard below). Go type in “best crypto charting tools” in Google and you’ll see why!
There are a million scrappy ways to make money online. This type of affiliate marketing was one strategy that we used, and it was extremely effective for financing the early days of our software startup. I blog about these types of online money-making adventures all the time (like the time I made $13,000 by growth hacking Instagram), and I email all of my best marketing tactics and ideas directly to the people on my email list. If you want to get the inside scoop on the various digital marketing tactics that I’m using to grow my businesses, simply subscribe to my email list below! No spam ever. Just my best tips and tricks that I’m personally using. I’ll see you in the inbox! Original article w/ pictures and data available here: https://davidkemmerer.co/affiliate-marketing-to-bootstrap-startup/
Hey all, first post on here, so please pardon if i unintentionally say something in the no-no zone. As question states - let's say you are FIRE now or around FIRE territory, but you haven't "locked in your lifestyle" yet. Would you be willing to gamble away some of your quality of life for the possibility of a better quality of life? If so, how much of it? Here's the situation with boring details - I have a friend (male) who is around age 30-35, NW around $2 mil USD. Works in high-tech and easily makes anywhere from 300k-500k/year pretax in California. Almost all of his net worth is in equity, and virtually all of it is after-tax, so there's not much capital gains even if everything was to be sold today. We're really close friends, so I've witnessed his successes and failures. Having worked consistently stressful 50+ hour work weeks (some times even 80-100 hweek), he practically developed PTSD from coding; and as such, I don't think he ever wants to step back in to his "career". He even almost had a divorce (they are just separated now, but they are on good terms and might get back together; it gets more complicated, but you can safely assume the wife won't be taking any of the $). The one thing to note is that he's actually a pretty hardcore gambler. One time his net worth got almost as high as $8 mil USD (some of these are exotic investments though, so they aren't as liquid, and that's why it seemed as if he lost $6 mil; however, it's partially due to extremely shit timing/luck. Think closer along the lines of like... illiquid crypto derivatives). So one day we were drinking (oh, he's also a heavy drinker... imagine like Russian-style vodka as water) and he explained his situation and posed me the question. Basically, he wants to try to "gamble" close to half of his investments in more riskier investments; while keeping the other half in "more modest investments" like mostly VTI. His reasonings are that:
His initial perpetual withdrawal rate is 3%; but thinking on it, $60k is "sufficient but not necessarily comfortable" (those were literally his words). Also, he thinks that there may be periods where he can only draw down 1-2%/year if the US hits conflicts...etc. since 60 years is a LONG time to try to predict, and past performance is not indicative of the future.
This is even more pronounced if having to support/raise a family of 4-5 people.
His expected "gamble" should pay out closer in the range of $1.5-$5 mil over the next 5-10 years; with the losses being somewhere between potentially -30% to -60% over the next 5-10 years. So his reasoning is that "hey, even if i only have $1.5 mil (referencing his total portfolio) at the end of the day, i can just go get a chill job as a teacher or something"
He gets pretty competitive (like he wants to be in the top 1% of net worth in USA, although mostly for fun); but also wants to have that extra "peace of mind" and be able to trade more $ for more "comfort". Like, he literally showed me a curved graph of the relationship between "using $ to remove barriers" and "happiness" (his peak seems closer to $120k if anything).
While he could move back to somewhere with lower cost of living (or even internationally - he's a polyglot and enjoys learning new languages), he may want to raise kids in the US, and potentially give them a better education in California (or at the least, not let money be the limiting reason NOT to be able to)
I don't think there is a word in the english dictionary that can describe how much he abhors his job/career; and while he enjoys some aspects of creating software/building products, he is most certainly traumatized by even the mention of "working one more year". The reason he's okay with risking more now is that he's still "fairly young" in the grand scheme of things, so it's better to gamble now than later in life.
Having gone through multiple health crisis, he "no longer wishes to trade health for money". I think he even joked about how he'd rather become a male stripper instead of a software engineer, because he'd be a lot healthiefit and people might pay him anyways (to put his clothes back on).
As being his best friend, i've been thinking about this situation a lot (some of which are applicable to me and everyone here as well). So, just wanted to toss it in the ring to see if anyone has given this any thought. I think most everyone is objectively thinks that FIRE is "a concrete number", and that "once you hit your magic number", you tend to be "good to go". However, as i've thought about it a lot more, I think FIRE is more of a spectrum, and that the lines for "freedom" and "comfort" vs "risk" and "work" gets a lot more blurry than we probably think. I'd love to hear more from people especially if they have already hit FIRE and have thought about this as well.
I'm curious to know how other traders import their tax information into their W2s, I have 5 different centralized exchange trading account as well as several DEXs I trade on. I do a lot of swing trading so my trades are somewhere in the thousands for 2019. I'm trying to input the .csv file and it won't accept it, now it wants me to input everything by hand... If they seriously expect ppl to input ever single trade they're high, especially for day traders.
Aussie Exchanges Partner With Crypto Tax Firm as ATO Eyes Traders
Crypto taxation software provider Koinly has announced a partnership with three Australian digital asset exchanges to simplify their clients’ tax reporting. Coinjar, Cointree and Swyftx announced support for Koinly on July 29, allowing the exchanges’ customers to automatically feed trading data to Koinly via csv or API, and access detailed capital gains reports. “Even though […]
Updates from the call with the IRS on crypto/virtual currency taxes
Few days ago I posted on Reddit & Twitter asking people to submit their crypto tax questions. Thanks everyone for sending me bunch of questions. The call with the IRS was only 30 min so couldn't go thru all of them, but got answers for some common questions. See below for highlights. Please don't take this as tax or financial advice; this is based on a conversation we had with several IRS representatives. The IRS does not make laws; they only implement laws. My additional notes in italics. Shehan: where should staking income be reported? Schedule 1 as other income? Schedule B as interest? or Schedule E as rental income? IRS: The agent on the call seemed more lenient towards reporting staking income on Schedule 1, other income line. Not Schedule B as interest income. He did not mention about Schedule E but in order for you to deduct expenses related to staking income (assuming you are doing staking as a "trade or business" , it could be reported on schedule E. Schedule 1 and Schedule B do not allow you to write-off expenses There is also a question aboutwhenstaking income should be reported - at the time of receipt Vs. at the time you sell it. You can read more about this on thisCoinDesk article which was published today. You can see my comments there. Shehan: When should HIFO/FIFO/LIFO be applied? Can taxpayers apply it after the fact at the end of the year or they need to apply it at the time they are selling crypto? IRS: You can apply HIFO/FIFO/LIFO at anytime as long as you keep good records. If you use a crypto tax software, they should have those records in case the IRS requests them during an audit. BTW, you don't have to mention on tax forms which method you are using. Shehan: Should you apply FIFO/LIFO/HIFO per wallet, per asset class or on universal basis? IRS: If you can full fill the criteria for Specific ID (Q39), you can pick and choose from anywhere (by wallet, asset class or universal) as long as you have good records. FIFO, LIFO & HIFO are subsets of Specific ID. Shehan: Will there be any guidance coming out before next tax season? IRS: No, due to Covid, it will be delayed. Shehan: Will future crypto guidance be effective retroactively? IRS: IRS generally does not release guidance which is retroactive. Unless the new guidance is a clarification of an existing law, new guidance is active only going forward. Let me know how you feel about all this 👇 lol https://preview.redd.it/rad96w0h13f51.jpg?width=1024&format=pjpg&auto=webp&s=804281c1c5c3b4260309335fb71042447870bdd1
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Best Cryptocurrency Tax Advisor for Crypto traders
*Demo begins at 3:08 This video walks through the CryptoTrader.Tax platform. In this demo, we are walking through the flow of a user who has traded on Coinbase, Binance, and Poloniex. For a ... Trading Criptomonedas en cuenta demo ... Semillero de Ingresos 7,394 views. 15:26. CryptoTrader.Tax Demo Video - Crypto Tax Software - Duration: 7:56. CryptoTrader Tax 198 views. 7:56. YOUR ACTUAL INVESTMENT OR TRADING DECISIONS. CRYPTOBUD MEDIA LLC WILL NOT ACCEPT LIABILITY FOR ANY LOSS OR DAMAGE, ... The Best Crypto Tax Software? Check Out Accointing. Will Wright from Mining Store & Adrian Forza from Crypto Tax Australia break down the complexities of taxation in the cryptocurrency industry and make it simple for the every day user to understand. Crypto Tax Advisors, LLC was founded by Sharon Yip, a CPA with 20 years of tax experience in public accounting and industry. We are also a crypto enthusiast and an active cryptocurrency investor.