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   Strategies & Market TrendsBlockchain and Cryptocurrencies


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To: Elroy who wrote (2700)3/29/2021 12:49:10 PM
From: w0z
   of 4339
 
Beware of the fees though, which are typically higher than a traditional IRA.


Not unless "traditional" means a company managed 401k versus self-directed which you manage yourself. Managed usually only have a few ETFs or the company stock. When I retired, I moved everything to a self-directed IRA. The choices (stocks, bonds, ETFs, etc) and fees (low or none) are just like a taxable brokerage account. eTrade does not offer individual cryptos, only ETFs like GBTC, ETHE, etc.

So i really don't know what they mean. I'm not aware of any brokers who offer cryptos directly but I think that will come in time.

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To: Elroy who wrote (2700)3/29/2021 1:33:47 PM
From: Larry E
1 Recommendation   of 4339
 
From Wikipedia:

A self-directed individual retirement account is an individual retirement account (IRA), provided by some financial institutions in the United States, which allows alternative investments for retirement savings. Some examples of these alternative investments are: real estate, private mortgages, private company stock, oil and gas limited partnerships, precious metals, horses and livestock, and intellectual property. [1] The complexity of the rules for self-directed IRA's [2] prompted the SEC to issue a public notice in 2011 [3] against an increased risk of fraud.

In 2019, the maximum self-directed IRA and self-directed Roth IRA contribution was $6,000 or $7,000 if over the age of 50. [4]

Internal Revenue Service (IRS) regulations require that a qualified trustee, or custodian, hold IRA assets on behalf of the IRA owner. The trustee/custodian provides custody of the assets, processes all transactions, maintains other records pertaining to them, files required IRS reports, issues client statements, helps clients understand the rules and regulations pertaining to certain prohibited transactions, and performs other administrative duties on behalf of the self-directed IRA owner.

The account owner for all IRAs chooses among the investment options allowed by the IRA custodian. For regular IRAs these options usually include stocks, bonds, and mutual funds, but with a self-directed IRA, the term "self-directed" refers to the significantly broader range of alternative investments available to the account owner. IRA custodians are allowed to restrict the types of assets they will handle in addition to Internal Revenue Code (IRC) restrictions. [5]

From Me:

From what I have seen, setting up an S-D IRA can have fairly high startup costs, that can include the creation of an LLC, as well as other setup charges, as well as annual fees, over and above any transaction charges when buying or selling a crypto. I have decided that the cost and complexity makes it a no-go for me.

Larry E

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From: Glenn Petersen3/30/2021 8:44:09 AM
2 Recommendations   of 4339
 
PayPal launches crypto checkout service

PUBLISHED TUE, MAR 30 20215:54 AM EDT
Reuters

KEY POINTS

-- PayPal has started allowing U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally.

-- Customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at checkouts to make purchases, the company said.

-- The service will be available at all of its 29 million merchants in the coming months, the company said.

PayPal will announce later on Tuesday that it has started allowing U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally, a move that could significantly boost use of digital assets in everyday commerce.

Customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at checkouts to make purchases, the company said.

The service, which PayPal revealed it was working on late last year, will be available at all of its 29 million merchants in the coming months, the company said.

“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet,” President and CEO Dan Schulman told Reuters ahead of a formal announcement.

Checkout with Crypto builds on the ability for PayPal users to buy, sell and hold cryptocurrencies, which the San Jose, California-based payments company launched in October.

The offering made PayPal one of the largest mainstream financial companies to open its network to cryptocurrencies and helped fuel a rally in virtual coin prices.

Bitcoin has nearly doubled in value since the start of this year, boosted by increased interest from larger financial firms that are betting on greater adoption and see it as a hedge against inflation.

PayPal’s launch comes less than a week after Tesla said it would start accepting bitcoin payments for its cars. Unlike PayPal transactions where merchants will be receiving fiat currency, Tesla said it will hold the bitcoin used as payment.

Still, while the nascent asset is gaining traction among mainstream investors, it has yet to become a widespread form of payment, due in part to its continued volatility.

PayPal hopes its service can change that, as by settling the transaction in fiat currency, merchants will not take on the volatility risk.

“We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants,” Schulman said.

The company will charge no transaction fee to checkout with crypto and ohttps://www.cnbc.com/2021/03/30/paypal-launches-crypto-checkout-service.htmlnly one type of coin can be used for each purchase, it said.

Link

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To: Glenn Petersen who wrote (2704)3/30/2021 9:53:59 AM
From: w0z
2 Recommendations   of 4339
 
Yikes! I hope people realize that every transaction from crypto to cash or from crypto directly to purchase goods will be a taxable event!

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To: Glenn Petersen who wrote (2704)3/30/2021 10:48:13 AM
From: Elroy
1 Recommendation   of 4339
 
- PayPal has started allowing U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally.

-- Customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at checkouts to make purchases, the company said.

-- The service will be available at all of its 29 million merchants in the coming months, the company said.



Interesting, but......isn’t Bitcoin “property” for tax purposes, so when you spend $10 of Bitcoin to order batteries online at some web merchant, doesn’t that trigger a taxable event and you need to determine the cost basis of that little bit of Bitcoin which you just used to buy batteries to determine your capital loss / gain?

Maybe PayPal never gives their users ownership of the Bitcoin, they just credit accounts accordingly and hold the crypto themselves, so they gotta manage taxes for their PayPal crypto trades, and just credit account holder’s properly?

Using Bitcoin for small buy/sell transactions doesn’t fit in with the tax code, I think.

I see Wozjust said the same thing!

My guess is PayPal holds the Bitcoin for the customer account, and the customer never owns it, so the tax report8ng rests with PayPal. PayPal won’t buy and sell Bitcoin for each transaction, it will instead make perhaps one large Bitcoin trade per day, which balances out its customer’s buy/sell orders that day. So.....since the customer never actually owns the Bitcoin,the customer has no tax reporting obligation.

Just my guess.

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From: kidl3/30/2021 11:35:02 AM
   of 4339
 
Globe says crypto guidelines call for IIROC membership

2021-03-30 08:53 ET - In the News

The Globe and Mail reports in its Tuesday edition that Canadian securities regulators have issued guidelines for cryptocurrency trading platforms. The Globe's Vanmala Subramaniam writes that the guidelines were published by the Canadian Securities Administrators. All platforms that facilitate trades in digital tokens or contracts involving crypto assets are now required to register as investment dealers and become members of the Investment Industry Regulatory Organization of Canada. The Ontario Securities Commission has ordered crypto trading platforms to bring their businesses "into compliance" by April 19. The new guidance provides clarification for Canadian exchanges such as Bitbuy and Coinsmart. Crypto trading platforms that hold their customers' crypto assets will have to register as securities dealers with provincial authorities. Within two years, these platforms will have to become members of IIROC if they provide services to retail investors, which most do. Lawyer Matthew Burgoyne says the new OSC guidelines signal there is no longer a grace period when it comes to cracking down on unregulated crypto trading platforms. He says, "You don't want to be on the receiving end of enforcement."

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To: kidl who wrote (2707)3/30/2021 12:56:52 PM
From: Elroy
   of 4339
 
Does anyone know if you trade fiat currencies in a personal currency trading account, are trades taxable?

It seems crypto trades should be similar to fiat currency trades. Normal people don’t report fiat currency trades to the IRS. If you go to Europe and exchange $2000 into euros ata certain rate, then on return change 200 euros back to USD at a different rate, no one reports the gain/loss on the second exchange.

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To: Elroy who wrote (2708)3/30/2021 2:39:04 PM
From: Larry E
   of 4339
 
It may be like buying something expensive in a state that does not charge sales tax, you are supposed pay the sales tax in the state you reside in, but nobody does.

People in Maryland who had an appropriate vehicle would drive to Delaware to buy a washer, to avoid the sales tax.

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To: Glenn Petersen who wrote (2704)3/30/2021 3:00:04 PM
From: rogermci®
   of 4339
 
Looks like they're playing market maker. BTW any tax due assuming there is tax due after a taxable event when buying with an appreciated asset? Most everybody paying with bitcoin is in that position.

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To: w0z who wrote (2705)3/30/2021 4:10:22 PM
From: Glenn Petersen
1 Recommendation   of 4339
 
Still, the terms and conditions for “Checkout with Crypto” include a number of important caveats. Chief among them is the tax liability: “Sales of Crypto Assets via Checkout with Crypto are taxable just like all other sales of Crypto Assets.”

PayPal will provide the consumer with a 1099 tax form and report to the U.S. Internal Revenue Service as necessary, but “it is your responsibility to determine what taxes, if any, apply to transactions you make.”


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