Risks & Rewards of Buying Bitcoins – tax implications

bitcoin-australia-accepted

Play the Markets: The fastest—but riskiest—method is to go straight to the markets. So, say, for Mt. Gox, the reputed “world’s oldest and largest Bitcoin exchange,” you first have to sign up, create a user name and then respond to the confirmation your email verifying your address.

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Then the system will ask that you scan and send confirm your real address and residence there for the last six months, and provide a government-issued photo ID. You will not however, have to include sensitive information such as your SSN.

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Then it’s simply a matter of depositing funds into your account and carefully watching the market for opportunities to make money. Like any exchange, Mt. Gox does charge a fee on your transactions, ranging from .60 percent per trade down to .25 percent per trade, which the company uses to support the business as a whole:

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But, once again, be warned. Just because it’s a digital currency doesn’t mean you won’t lose real cash money trading in it. And given that the current Bitcoin market is more volatile than a bag of plutonium nitrate, multi-explosive, sound seeking projectiles, you stand a very good chance to lose a lot of money, especially if this is your first foray into day trading. So unless you have cash to burn or you’re already a grizzled day trading veteran, you might want to take one more look at mining after all.

Risks and Rewards

So that’s how you make your foray into Bitcoin. It’s important, though, to first ask yourself if you really want to in the first place.

For conventional currency markets trading in the monies of stable, profitable countries, the fluctuations within the value of each currency is measured in fractions of a penny. Bitcoin values, on the other hand, rise and fall dramatically throughout each trading day, jumping in whole dollar amounts. This means that if you don’t have your act together and place a transaction order at the right time, you will lose magnitudes more cash than you would have trading dollars for yen. The value of Bitcoin as a whole, for example, dropped more than 50 percent over the 36 hours after China banned the cryptocurrency. A lot of speculators lost their shirts during that day. And it will almost certainly happen again.

What’s more, unlike traditional arbitrage play, the inherent volatility of the BTC market all but forces investors to offload their coins as quickly as possible to avoid getting caught in a crash. However only when investors hold onto their digital commodities for longer periods of time will the market actually stabilize. It’s a catch-22. And without commercial institutions like banks, which have huge reserves of liquid capital they can rely on, individual investors often can’t afford to just sit on their Bitcoin and wait for a rainy day.

Conversely, if one were to take the super-long view and, say, bought a few shares in 2012 at a sub-$100 price point, even with Bitcoin dropping half its peak value, that investor would still theoretically make over a 600 percent return on his investment just by waiting. Granted, the sub $100 days are likely now over, what with the currency’s new-found stardom so we’ll have to wait and see how the market plays out.

Even those big hits, though, come with big tax implications. As Forbes contributor Cameron Keng points out:

Bitcoin is taxable, whenever a taxable event occurs. A taxable event is whenever you cash out your bitcoin for any fiat currency (dollars, euros and etc.) or when you trade a bitcoin for anything (bartering). In taxation, bitcoin is best understood as an “asset.” Whenever you hold an asset, it can increase or decrease in value. When you trade the bitcoin for fiat currency, then you’re trading an asset for dollars. It works the same way as when you trade gold bullion for dollars.

Bartering or exchanging bitcoins for anything is also a taxable event. For example, Bob trades 1 bitcoin for a year’s worth of hugs. Bob traded or bartered 1 bitcoin for a year’s worth of hugs or a service. This is a taxable event. The same is true, if you traded 1 bitcoin for a tangible or intangible object. This even applies if you’re trading 1 bitcoin for another bitcoin.

Simply put, if Bitcoin is to be treated like legitimate currency, it’s going to be taxed like legitimate currency.

Nor should you assume that your Bitcoins are completely secure either. As Mark Vankempen, senior advanced R&D engineer at LogRhythm, explained to the IT Business Edge:

A BTC wallet is like a real wallet filled with cash. You should never keep all your eggs in one basket and the BTC wallet is no different from this age old idiom. So far there is no air tight solution to keeping your BTC safe and secured…the following action items that can help protect your BTC investment: Backup and encrypt your wallet, make multiple copies of your backup, store them in more than one secure location and finally, don’t keep all your BTCs in one wallet.

Don’t pull a Bitomat.pl. This former mining company lost 17,000 BTC (worth about 14.5 Million USD) during a routine maintenance restart when the server hosting the company’s digital wallet ate itself.

The Bitcoin’s meteoric rise in value and the relatively low risk of being caught stealing it have also combined to make the currency a huge target for cyber criminals. Smaller online exchanges that have skimped on security systems can be hacked. The Sheep Marketplace, for example, had 96,000 Bitcoins (worth $220 million) stolen earlier this year, as did GBL andTradefortress. Criminals also routinely target internet-connected computers that store individual Bitcoin wallets, attacking them with everything from malware and phishing tactics to old-fashioned social engineering. And as recently as last November, thieves stole nearly a million dollars worth of Bitcoin from Bitcoin Internet Payment System (BIPS), a Denmark-based Bitcoin payment processor.

In short, even if you trade Bitcoin brilliantly, you’re still susceptible to giant losses the good ol’ fashioned way: theft.

Tax Planning – Why You Need Retirement Planning Assistance

Why You Need Retirement Planning Assistance

 

Although most people eager look forward to the day when they can retire, few of these individuals are doing all that they can to financially prepare for this time. Getting retirement planning assistance is one of the best things that you can do to gain assured comfort and financial health during your later years. A qualified adviser can help you protect your portfolio from extraordinary taxation and inflation. (see more at http://fpa.asn.au/)

 

Certain investments are good for long-term savings given that these are guaranteed to stay ahead of inflation. They will have the same overall value when it is time for consumers to rely on these. Others, however, will gradually diminish in worth throughout the years. Although they might seem like solid investments now, the related returns can be greatly diminished by the passage of time.

 

It is important for people to note that all portfolios must have some measure of risk associated with them. Profit potential is usually directly associate with the amount of risk that an investment entails. Thus, people who want to implement aggressive savings plans for greater comfort and financial health will need to work with advisers who can show them how to mitigate this risk.

 

Diversification is important as well. Those who are preparing for their retirement years should have a diverse array of investments as this is a great way to mitigate risk and to acquire assured profits. People can invest in stocks, bonds, precious metals. They can also take advantage of the extraordinary profit potential of emerging markets for long-term investments.

 

If you want to be truly diligent in the management of your retirement photo, you or your advisers should review it once every few years (see comments by Richard Tjiong). This will allow you to reallocate your assets as needed, to address areas of increased risk or profit potential. Moreover, you adviser can use these reviews as an opportunity to help you find further tax shields based upon the most recent changes in tax laws. See more on planning for your retirement at http://centuriataxastute.com.au/investment-bonds-for-retirement-planning/

For more info on Trustee Regulations and the Australian court rulings in relation to this see article by Richard Tjiong at Richard-tjiong.com.au/

Nationwide Debt Direct – debt settlement benefits

The Benefits of Debt Settlement

 

When it comes to debt management options, one of the lesser-known yet effective ways to get your debts under control is debt settlement. Nationwide Debt Direct settlement is as straight forward as it sounds-you settle your debt- but you can either do it outright or over a short period of time, for less. Let’s explore the benefits of debt management, to see if it’s the right debt management option for you.

 

  1. Get Debt Free- Fast

 

There really isn’t a quicker way to get debt free than by settling your debts. When you make an agreement with your creditor, you can make a payment of as little as 50% of the overall amount, in no time at all. Once you have set the parameters of your repayment with your creditor and completed the agreed payment, you’re debt free! A Nationwide debt direct debt settlement company can advise you on credit settlement options and get you the best repayment prices, so make sure to do your research.

 

  1. Save Money

 

By paying less of your debt’s overall amount you’ll be saving an initial sum of money, but have you considered the money that you will save in the long term? Without a debt to pay, you will no longer owe interest to your creditors, not to mention late fees and any hidden charges that may have been linked to your original debt. This will save you money throughout the course of a year, as well as throughout the course of the initial loan agreement term.

 

  1. Reduce Stress

 

It’s no secret that financial troubles cause stress for many of us, and that stress can last for years into the future. As circumstances change, so do our needs and not having to pay off a certain, significant debt can give you some much needed financial backup in the long term. Not having to deal with the stress of paying off a particular debt you can relax, and focus on the more important things in life.

 

  1. Start Fresh

 

It never hurt anyone to make a fresh start, and getting on top of your financial situation in its entirety is the best possible way to wipe the slate clean. Other debt management plans may allow you to keep existing credit options, such as credit cards and store cards, but if you are struggling to make repayments it’s not likely to work out for the best in the long term. Declaring bankruptcy is often a solution that has severe ramifications down the line too, so the only way to get debt free and clear the slate is to settle your debts.

 

So as you can see, debt settlement really is a great way to get debt free without making a mountain out of a molehill, so if you are struggling to repay your debts and would like more information about your debt settlement options, please feel free to contact us at Nationwide Debt Direct today.

 

 

Douglas E. Castle

About business consulting Douglas E Castle : Ensuring that a business expands as effectively as possible is a very important thing for any company owner to think about and knowing the right way to do so can make a lot of difference. The financial position of an organization will say a lot for the way in which it can grow, and so getting on top of your finances as quickly as possible should be a priority.

 

Knowing how to perform specific tasks such as crowd funding, investment sourcing and capital management isn’t always an option for business owners, but that’s where a business consultant will come in handy. They will be well versed at the inner workings of business management and so will able to all but guarantee that the best chance of financial backing is achieved.

 

Crowd Funding

 

This form of financial backing has only been in existence over the past decade or so, mainly due to the existence of the internet. Crowd funding will typically rely on a range of investments from a variety of contributors. These contributors can be offered shares in the company in exchange for their participation, but in many instances the promise of a return payment with interest can help to sway the masses. Knowing the right angle of approach is very beneficial and a business consultant will be able to gauge how effective particular marketing ploys may be when compared to others.

 

Private Investments

 

Certain individuals and businesses will look for unique investment opportunities that can offer a return on their initial investment, and being sure that your organization becomes one of these opportunities is something that business consultants specialize in. By developing a business plan, a company can benefit from positive exposure that promises investors a reliable opportunity to turn their investment in to a profit as time progresses.

 

Inventory Financing

 

One of the biggest outputs for a business is the cost of operating. Everything costs money; from powering a factory, to paying members of staff. It’s not always as simple as accounting and there are several varying aspects to consider. These aspects may not always be obvious to business owners, but they will often be second nature to a business consultant. By understanding the inner workings of a businesses’ spending habits, it will be a simple task to make alterations to these activities in order to improve their financial standing.

 

Insurance

 

One of the most frequently overlooked activities within a business is the requirement for insurance. In cases where standard insurance may not provide full coverage, it may be necessary to obtain an alternate level of insurance. Knowing the right type of insurance to choose can make a lot of difference and can even help to eliminate unnecessary policies which can sometimes add to a budget.

 

As complicated as the majority of these aspects may sound; they are a simple task for experienced business consultants the likes of which you will find at Douglas E Castle Consultancy, and can make all the difference to a businesses’ potential.

 

Listen to Douglas E Castle here, and here http://www.quora.com/Douglas-E-Castle-1

Obama tax reform overture grabs K Street’s attention

From: http://thehill.com/policy/finance/220089-obama-tax-reform-overture-grabs-k-streets-attention

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By Bernie Becker – 10/08/14 06:00 AM EDT

K Street has a message for President Obama when it comes to tax reform: Talk is cheap.

Senior White House officials have started making overtures about a deal to revamp the tax system for businesses next year, arguing it’s one area where there is common ground with the GOP — an important consideration if Senate control flips to the Republicans in November.

But for tax reform to become real, lobbyists say, the Obama administration will have to translate words into action by engaging vigorously with Capitol Hill on the arduous process of crafting legislation.“I hear the happy talk,” said Jade West of the National Association of Wholesaler-Distributors. “Any time there’s talk about tax reform, we react.”

“We’re paranoid. We’ll start lobbying,” added the former Senate GOP aide. “But I just don’t see it.”

On paper, the possibility of a Democratic president and an all-Republican Congress next year would appear to be a promising set-up for tax reform.

The president, facing his final two years in office, would be grasping for an achievement to round out his tenure.

Senate Republicans, staring at an unfavorable 2016 map, would have incentive to find a legislative achievement they could bring to voters in swing and Democratic-leaning states.

And House Republicans would have the chance to tackle an issue that they have long argued should be a priority.

Speaker John Boehner (R-Ohio) made tax reform one of his five pillars for sparking the economy, and Rep. Paul Ryan (R-Wis.), the favorite to take over as the House’s top tax writer next year, has expressed a desire to tackle it head-on.

There’s even bipartisan agreement that the U.S.’s corporate tax rate is too high, the code too riddled with tax breaks and the international system for businesses long overdue for an upgrade.

Republicans have proposed reducing the top corporate rate from 35 to 25 percent, lower than the administration proposed in 2012.

With all that as a backdrop, both Jason Furman and Jeff Zients have talked up the possibility of tax reform being an area of bipartisan agreement before Obama leaves office.

Furman, chairman of the president’s Council of Economic Advisers, said last month that Obama “would certainly love to sign a business tax reform bill.”

Zients, the director of the National Economic Council, went even further, insisting that Obama’s framework to revamp the tax code for businesses was “remarkably similar” to a plan from House Ways and Means Committee Chairman Dave Camp (R-Mich.).

“That makes me optimistic that we can get something done,” Zients said last week.

“President Obama has long advocated for reforming our tax code to make it more simple and fair, and he has been clear that he is willing to work with both parties to get that done,” said an Obama spokeswoman.

“The president has put forward a framework for business tax reform that lowers our corporate tax rate, closes wasteful loopholes, and simplifies the tax code for everyone, and he will continue to call on Congress to take action.”

That talk has piqued the interest of the variety of the business coalitions in Washington pushing for tax reform.

Jeff Birnbaum of the Coalition for Fair Effective Tax Rates said Obama and his aides have only given “lip service” to tax reform in the past.

But Birnbaum, whose has long stressed that an overhaul of the code needs to also help businesses that pay through the individual system, said the interest from Boehner and Ryan, in addition to the comments from White House officials, could lead to something productive.

“That’s a pretty strong combination right there,” he said. “That’s not a bad starting place.”

Some congressional aides said they have seen increased outreach on tax reform in recent weeks from the administration. GOP staffers added that it’s possible Republicans could warm to a tax reform plan that only affects businesses, after having long pushed to reform the corporate and individual codes together.

Jon Traub of Deloitte Tax said it’s tough to say for certain how Obama would react to a GOP Senate; the president could see himself as the last line of defense for Democrats ahead of 2016.

“I don’t pretend to know what he’ll do. It’s certainly possible that he’ll say ‘I want to build a legacy,’” said Traub, a former senior aide to Camp. “Is the environment conducive for a deal? We won’t know that for awhile.”

None of that means that longstanding roadblocks to tax reform have disappeared, especially after Camp’s broad tax reform draft this year found few champions. Several top lawmakers, including Sen. Charles Schumer (D-N.Y.), have downplayed the chances for tax reform in the next Congress.

Democrats and Republicans remain divided over whether a revamped tax code should bring in more revenue. Obama has sounded open to rewriting the corporate tax system without added revenues, as Republicans have sought, but also wants an upfront influx of revenue to cover infrastructure spending.

The Urban-Brookings Tax Policy Center recently projected that nearly $840 billion worth of business income was reported on individual tax forms in 2012. Analysts say it would be difficult to craft an overhaul that included both those companies and traditional corporations without revamping the entire individual system.

Plus, as the recent debate over corporate inversions shows, taxes remain a politicized issue. Even as his aides were talking up tax reform, Obama criticized Ryan last week, stressing that the Wisconsin Republican is still seeking to lower the top rate for the highest earners.

Ryan himself hasn’t sounded overly optimistic about the prospects for tax reform, and has even floated officially adopting more “dynamic” scoring for tax bills. The GOP says that would more fully account for economic growth spurred by tax changes, but also would deepen the divide between the parties.

Ken Kies of the Federal Policy Group predicted that Obama would likely have to give ground on some big issues — whether to protect most offshore corporate income from U.S. taxation or lower the corporate rate to 25 percent, for instance — to strike a deal with an all-GOP Congress.

“In order for this to turn into real progress, they’re going to have to come around to some important policy positions that Republicans have on tax reform,” said Kies, a former GOP aide who worked on the 1986 overhaul of the tax code.

But a former Democratic aide now on K Street said that it would be up to both the White House and GOP lawmakers to find more common ground on tax reform.

“At the end of the day, he’s got to sign it,” the lobbyist said about Obama. “But a lot of it’s going to depend on whether a Republican Congress is willing to work with him.”

 

AT Partnerships News

Can Congress Pass Tax Reform That Would Stop Inversions? – Tax Reform AT Partnerships For Wealth

From: http://www.forbes.com/sites/taxanalysts/2014/09/30/can-congress-pass-tax-reform-that-would-stop-inversions/

Conservatives correctly point out that proposals to stop inversions from the Obama administration and Democrats in the House and Senate are only stopgap measures—a mere Band-Aid. If Congress were to tighten the anti-inversion rules first enacted in 2004 and further increase the foreign ownership requirements for mergers that move American businesses’ corporate legal residence outside of the United States, it would stop the type of deals that are now getting all the attention. But we still will not have solved the fundamental problem of tax motivated foreign ownership of U.S. businesses.

Right now the U.S. tax system favors foreign owned corporations over U.S. owned corporations. Although you often hear about the U.S. having a higher corporate tax rate than other major economies, this really has little to do with the disparity between U.S. and foreign ownership. The two big factors that make foreign ownership attractive for tax purposes are 1) that foreign owned firms can pay a lot less tax on their non-U.S. activities (because as non-U.S. firms they are under territorial regimes) and 2) that they can pay a lot less on their U.S. activities (because U.S. rules make it much easier for foreign owned firms to strip earnings out of the United States). Read more

Global tax reform top of the agenda for G20 finance ministers this weekend

By 

From: http://www.smh.com.au/national/global-tax-reform-top-of-the-agenda-for-g20-finance-ministers-this-weekend-20140919-10j9cu.html#ixzz3ElrP4yvD

The world’s most powerful central bank governors and finance ministers gather in Cairns this weekend for a series of highly charged economic meetings – one of their last chances to discuss as a group the problems afflicting the global economy before the all-important G20 Leaders’ Summit in Brisbane in November.

Treasurer Joe Hockey has been in Cairns for much of the week, meeting with Bank of England governor Mark Carney and International Monetary Fund chief executive Christine Lagarde. The official meetings will start on Saturday.

Mr Hockey has flagged that he wants the G20 finance ministers and central bank governors to focus on tax.

“Hopefully this weekend G20 finance ministers will sign up to an agreed global approach to ensure that companies pay tax where they earn the money,” he said this week. “It’s not an easy outcome, but we are going to work damn hard at it.”

He also wanted to talk seriously about the stability of the global financial system, including the rules for banking and prudential supervision of financial markets.

“We believe that at the G20 we can sign off on a number of initiatives that are going to ensure that banks that fail in the future are going to be held responsible for their own failure and systemically important banks don’t have to turn to governments to be bailed out by taxpayers,” Mr Hockey said.

In the days leading up to the event, the IMF said its attendees must seize the moment and commit to “decisive” reforms to bolster global economic growth.

Global growth had been much weaker than expected in the first half of this year, it said, and desperate action was needed to boost growth around the world.

The call put pressure on the commitment made by G20 members at a similar meeting in Sydney in February to grow their economies by 2 per cent above current projections over the next five years.

Mr Hockey said Australia was on track to hit the target, with stronger employment growth this year, but he was aware of the challenge ahead of him.

On tax and regulation, Mr Hockey said it was “hugely important” to discuss the need to have common reporting standards across different tax jurisdictions.

He said tax authorities needed to know when new bank accounts were being opened so they could tell if those accounts were being used to hide money in tax havens.

“We also hope to finalise the rules in relation to shadow banking … [because] it represents a potential significant threat to the stability of the global financial system.”

Mr Hockey said he hoped to “bring to a close” a lot of the “over-regulation” in financial and banking markets that occurred following the global financial crisis.

Other attendees this weekend include US Federal Reserve chairwoman Janet Yellen and European Central Bank president Mario Draghi. Reserve Bank governor Glenn Stevens and Treasury Secretary Martin Parkinson will also attend.

There are five topics on the agenda: global economy, growth strategies, investment, tax, and financial regulation, with side sessions on infrastructure, international business and civil society.

Read more: http://www.smh.com.au/national/global-tax-reform-top-of-the-agenda-for-g20-finance-ministers-this-weekend-20140919-10j9cu.html#ixzz3ElriBtvJ