Crypto Losses? Tax Gains!

February 1, 2023 by admin

Crypto-Tuesday January 31, 2023 – If you’re like most crypto enthusiasts, you’re probably not too thrilled about the recent losses in the market. But did you know that there may be a silver lining? In some cases, your crypto losses can actually lead to tax gains! Here’s how it works…

When you sell cryptocurrency, the proceeds are considered a capital asset and could be subject to either short-term or long-term capital gains taxes. Short-term capital gains are taxed as ordinary income, meaning that they’re subject to your marginal tax rate. Long-term capital gains, on the other hand, receive preferential tax treatment and are taxed at a lower rate than ordinary income.

Fortunately, when it comes to crypto losses, the Internal Revenue Service (IRS) gives you the ability to deduct them from your other gains in the same tax year. This means that if you have a net loss of cryptocurrency during the year, you can use it to offset any other gains you may have made, reducing the amount of taxes you owe.

The good news is that these losses can also be carried forward to future tax years. This means that if your losses exceed your other gains during a given year, you can still deduct them from your taxable income in future years.

Ultimately, it pays to know the tax implications of your cryptocurrency losses and how they can be used to offset other gains. By doing so, you could be saving yourself some coin when Tax Day rolls around!

Attorney Steven A. Leahy reveals the Crypto-Tax secrets on Today’s Tax Talk!

https://www.cnbc.com/2023/01/30/how-to-handle-cryptocurrency-losses-on-your-2022-tax-return.html

https://www.wpsdlocal6.com/news/concern-grows-for-cryptocurrency-industry-in-new-year/article_99be2f2e-a173-11ed-905d-933bae3bc6bf.html

Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

IRS “Truck” Coming

January 30, 2023 by admin

Monday January 30, 2023 – The IRS recently announced a delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K. Tax year 2022 will be a “Transition” year.

As one tax expert put it, “the new changes constituted one of the largest ‘cash grabs’ by the IRS in recent memory and were likely to hit taxpayers ‘like a truck.’

On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act of 2021. Let’s take a look at how this new law could potentially impact taxpayers.

One area the reporting requirements will hit hard is fantasy sports players. They must report any payments they make over $600 to both the IRS and those receiving payment.

Previously, TPSOs had to report payments only if they were over $20,000 or more in value. A TPSO is defined as any business entity or person who processes credit card payments and/or engages in other activities related to money transfers and various other financial transactions.

Therefore, anyone engaging in fantasy sports leagues where cash payouts are made and processed via a third-party would be subject to these reporting requirements. These players will face increased chances of an audit or taxation. While the IRS has promised not to go after average taxpayers, this new law could target them, nonetheless.

Changes brought about by the American Rescue Plan Act of 2021 have direct implications on ALL taxpayers. The lower reporting threshold means increased 1099s being filed with the IRS and higher chances of audit or taxation.

Attorney Steven A. Leahy will evaluate the impact of the American Rescue Plan Act of 2021’s tax plan on the average American taxpayer on Today’s Tax Talk.

https://www.foxnews.com/media/irs-cash-grab-fantasy-sports-hit-americans-like-truck-tax-experts

Toth Hurts – IRS Unfairness

January 27, 2023 by admin

Thursday January 26, 2023 – The United Supreme Court declined certiorari on the case Toth vs. United States. Certiorari is the process by which an appellate court has the discretion to review decisions made by trial courts.

Becase the Supreme Court refused to hear this case the appellate court’s decision stands. And that decision stinks! I think a clear violation of the Eighth Amendment to the Constituion. The Eight Amendment simply says “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”

Justice Gorsuch dissented from the denial of certiorari. Monica Toth, an American citizen who failed to report a foreign bank account as required by law. The Internal Revenue Service assessed a civil penalty against Ms. Toth for her failure to report, which she argued violated her rights under the Excessive Fines Clause of the Eighth Amendment.

Justice Gorsuch noted that protection against excessive punitive economic sanctions is “fundamental” and “deeply rooted in this Nation’s history and tradition”. He further argued that it would be wrong for governments to evade constitutional scrutiny by labeling fines as “civil” rather than “criminal”.

In addition, he pointed out other reasons why taking up this case was worth consideration such as incentivizing governments to impose exorbitant civil penalties and clashing with original understanding of Eighth Amendment.

Some Judges write for other Judges to help them understand the legal basis for a certain ruling, or even provide their own interpretation of an existing law. This can help inform future decisions on similar cases, since the opinion can serve as precedent.

Some judges write with lawyers in mind, crafting legal opinions that are complex and highly technical, so that attorneys can use them as powerful tools when advocating for their clients.

Some judges write for the public, with the intention of making legal opinions easier to understand and more accessible to a wider audience.

Justice Gorsuch writes for the public.

Attorney Steven A. Leahy reviews Justice Gorsuch’s opinion on Today’s Tax Talk.

https://reason.com/2022/08/30/this-grandmother-didnt-submit-the-proper-banking-form-now-the-irs-wants-2-1-million-from-her/

https://reason.com/2023/01/23/supreme-court-declines-case-challenging-excessive-irs-penalties/

https://www.reuters.com/legal/government/us-supreme-courts-gorsuch-dissent-calls-217-mln-tax-penalty-excessive-2023-01-23/

https://news.bloomberglaw.com/us-law-week/supreme-court-punt-in-tax-fine-case-leaves-uncertainty-in-wake

SNOOP Act

January 26, 2023 by admin

Wednesday January 25, 2023 – American taxpayers may have reason to rejoice as Republican lawmakers introduced the Stop the Nosy Obsession with Online Payments (SNOOP) Act on Tuesday. The bill, if passed, would put an end to the Biden Administration’s new requirement passed in the American Rescue Plan of 2021, for Americans to report online transactions over $600.

As reported here, The IRS recently announced a “delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K.” California Rep. Michelle Steel and Tennessee Sen. Bill Hagerty are leading this effort in their respective chambers of Congress, looking to nix this intrusive policy forever, which is a weaponization of government against hardworking citizens.

Americans have long been wary of the government’s ability to intrude on their personal lives and financial information. But this new policy would have required all third-party platforms to report all online transactions over $600 the Internal Revenue Service (IRS). This policy would leave no room for privacy between a citizen and the government.

The SNOOP Act would revert back to the old rules, where third parties reported amounts of $20,000.00 or more AND 200 transactions.

Attorney Steven A. Leahy reports on these developments on Today’s Tax Talk.

https://www.foxnews.com/politics/snoop-scoop-new-gop-bill-would-put-stop-irss-600-online-reporting-requirement

https://www.yahoo.com/entertainment/irs-aims-cut-back-1099-211701325.html

https://www.msn.com/en-us/news/politics/bill-to-abolish-the-irs-likely-dead-in-the-house-gop-lawmaker-predicts/ar-AA16JnrZ

https://chicago.suntimes.com/columnists/2023/1/25/23571245/irs-policy-penalties-senior-citizen-monica-toth-supreme-court-jacob-sullum-column

Money – Seashells to Digital Currency

January 25, 2023 by admin

Crypto-Tuesday January 24, 2023 – Money serves three purposes: medium of exchange, preserving labor value over time and measuring goods and services across an economy.

The promise of Crypto was to provide all three purposes. However, Cryptocurrency still needs acceptance from people in order to work as a medium of exchange like traditional currencies do. That’s why the El Salvador move looked so encouraging. Using Crypto as a medium of exchange, rather than a store of value. That experiment hasn’t worked…yet.

Governments around the world have ratcheted up regulatory controls on Cryptocurrency. Our own Department of Justice proposed three regulatory and legislative priorities for combating cryptocurrency crime, including amending the anti-tip-off law for financial institutions to include digital assets, strengthening penalties and broadening the application of criminal laws governing operation of an unlicensed money transmitting business, and increasing limitations period to 10 years for all crimes that involve transfer of digital assets.

The White House also committed additional priorities such as aggressive investigations by SEC Chair Gary Gensler, as the SEC battles with the Commodities Futures Trading Commission to be the regulatory king in the Crypto space.

Attorney Steven A. Leahy looks at the past, present and future of money on Today’s Tax Talk.

https://www.deseret.com/2023/1/22/23558962/cryptocurrency-blockchain-us-dollar

https://news.bloomberglaw.com/us-law-week/crypto-actors-face-increased-enforcement-spurred-by-doj-network