Staying on the Goodside

Crypto Weekly

Income Island a New Frontier for the World to Explore the Metaverse

In last week's edition of Crypto Weekly, we went through all of the aspects of Income Island in some detail. We spoke about how different the concept is and about how unique. We described the intricacies of the private ownership of real estate on the island and the promise of recurring revenue generated from the private ownership of island properties. If you missed it you should go back and read it because it is one of the most promising and likely profitable frontiers of the Metaverse. It's what people imagine in their heads when they try to envision what the "Metaverse" experience will feel like or look like.

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The developers at Income Island are striving to produce something different from any other project and show investors that the crypto market can be safe, profitable, and even entertaining for everyone.

Why Income Island? There is a simple answer to this question. As an Island currency token owner, you'll be able to enjoy BNB reflections, advanced tokenomics, and earn real money while playing games. The developers tested ideas and concepts and sometimes failed during the early stages of the mission. Despite being knocked down at times by these attempts, they always got up again and returned even stronger. The process helped them find better solutions and learn from their mistakes. Throughout it all, they were thankful for the patience and devotion of the amazing Income Island community. They entered the market with clear targets, a strong drive to achieve the unthinkable, and a desire to create a product that would revolutionize the crypto market. The Income Island Token has a transparent and dedicated team that aims to provide investors with more passive income opportunities than any other coin in the market. They will improve, upgrade, and stand steadfast for this token throughout the development process. No matter how ups and downs the road may be, they are confident that they will succeed in their mission. Because that's who they are - community members working together for a better future for everyone.

Users of the Block chain will find Income Island to be a valuable experience. Income Island is an evolving, longterm project with clear targets that will yield generous profits for its investors. As the project progresses through its current stage of development, the game will continue to grow and expand. The game will continue to be developed while patches and improvements will be released as quickly as possible. 

Crypto Weekly

How to Keep Yourself On the Good Side of the IRS with Crypto

There could be enormous profits for cryptocurrency investors. This year, Bitcoin and Ethereum, the two biggest cryptocurrencies, are up 100% and 470%, respectively. The major coin, Solana, is up 13,300%, whereas Dogecoin has gained 4,900%.

Crypto owners may have benefitted from the profits, but taxes may be due soon, and the situation isn't clear. Cryptocurrency is taxed like any other investment, so it is not considered a currency but a stock. Capital gains taxes can be high when you sell coins, especially if you have owned them for less than a year. If you earn interest by lending or staking tokens, the interest is taxable, like interest from bonds and bank accounts. Crypto taxation depends on how investors trade, use, and manage their holdings. Cryptocurrencies are viewed as a growing and important new source of tax revenue by Washington. In President Joe Biden's infrastructure bill recently signed, Congress included several tax-reporting requirements for brokerages and businesses. Over ten years, the government expects to raise $28 billion by tracking and taxing crypto transactions. Crypto wallets and decentralized trading platforms may have to report tax information to brokerage companies, issuing tax forms containing more transaction details. As they would for cash over that threshold, anyone receiving more than $10,000 in crypto in 2024 will have to report identifying information on the sender of the crypto.

The government will also wreak havoc on taxpayers who underreport their gains. The IRS now requires taxpayers to declare if they have transacted or held a "financial interest" in virtual currencies. If taxpayers willfully fail to report all their income or profits from crypto, they may face penalties or prosecution. Compliance with Internal Revenue Service rules shouldn't be a problem in some ways. Cryptocurrencies are subject to capital gains tax on net profits from sales, and sales within one year of purchase are taxable as ordinary income. Depending on income levels, capital gains rates range from 0% to 15% to 20%, with a 3.8% surcharge for filers with modified adjusted gross income or investment gains exceeding $200,000.

Crypto losses can offset gains from other investments, such as stocks or real estate. Short-term trading losses in crypto, for instance, could be offset by short-term gains in stocks or vice versa. Many digital-asset exchanges do not issue standard 1099-B forms, so investors may have to do their own accounting. They record the cost basis of transactions and net gains or losses from sales. The taxpayer may have to

Crypto Weekly

consult a tax preparer or use software without these tools.

Coinbase Global's (ticker: COIN) plans to issue 1099-MISC forms to users with over $600 in "fee income and rewards" for activities such as staking their holdings and receiving interest. However, investors will have to calculate their gains or losses from crypto sales on their own since Coinbase doesn't provide 1099-B forms. Coinbase said it isn't issuing the form since the IRS does not require it for this year's tax season. The company plans to provide gain/loss reporting next year.

Gemini will issue 1099-K forms to customers who have transacted over 200 times and whose sales exceed $20,000. However, the forms do not include a cost basis, and other brokerages assist with this. RoboMarkets (HOOD) plans to issue cryptocurrency capital gains and cost-basis info on consolidated 1099-B forms and 1099-MISC forms for additional income. In 2021, both PayPal (PYPL) and Square (SQ) will issue 1099-B forms.

Cryptocurrency holders buy, hold, and exchange their holdings in a variety of ways, causing complications. To hold and trade cryptocurrencies outside of major exchanges, investors can use digital wallets or other non-brokerage accounts. Investors can transfer holdings from an exchange account to Metamask, a wallet with 21 million users, in order to hold them separately. Decentralized financial platforms allow investors to lend tokens to liquidity pools or stake assets to protect blockchain networks and earn interest. On automated trading platforms like Uniswap, buyers and sellers can also swap tokens using "smart contracts." Because these platforms don't track trading, gains, and losses, they don't issue tax forms.

When crypto-assets move between platforms, investors can lose track of their cost basis. Investing in capital gains or income is required by the tax authorities to determine profit and tax owed. Consider a discrepancy between self-reported investment income and proceeds reported by a brokerage. Investors may receive an audit notice from the IRS requesting them to reconcile the figures. According to David Kemmerer, CEO of CryptoTrader. Tax, a software provider, "Crypto can move from wallet to wallet, and people may not know what their cost basis is. The IRS gets information about who invests, but they don't know how much those investors actually make."

Meanwhile, new tax regulations included in the infrastructure legislation aim to close some crypto loopholes. The Treasury Department wants brokers to share their cost-basis information with the IRS to prevent investors from hiding gains. Digital wallets and DeFi platforms may have to provide brokerages with tax information under a new reporting regime. Changes in effect for the 2022 tax year may close a crypto-related "wash sale" loophole. Digital assets are included in the standard wash-sale rules in the Build Back Better bill. A loss cannot be written off if an investor purchases a "substantially identical" security within 30 days before or after a loss.

Bitcoin traders, for example, could now sell every time the price drops below their cost and then buy more right after (or before) the sale and claim a loss. According to wash-sale rules, the loss would be disallowed if an investor did this with a stock. If the stock bounces back, the investor could still add the loss to the cost basis, lowering taxable gains. However, crypto will likely be included in the wash sale. Owning crypto through a security, such as a stock, exchange-traded fund, or limited partnership fund, is a simple way to keep things simple. Several crypto funds trade over the counter, including Grayscale Bitcoin Trust (GBTC) and Bitwise 10 Crypto Index fund (BITW), a basket of major cryptocurrencies. The pass-through entities are taxed as pass-through entities, have steep expenses, and may trade at a premium or discount to the underlying holdings (both are now discounted). In contrast to the more common 1099-B, Grayscale issues a gross-proceeds tax form, and Bitwise issues a K-1.

A number of futures ETFs are currently trading, including the ProShares Bitcoin Strategy (BITO) and the Valkyrie Bitcoin Strategy (BTF). Bitcoin spot prices should be tracked reasonably well by the funds. On top of their management fees, the downside of these products is that they impose a drag on returns of up to 2.5% annually. In addition, they may also invest in other crypto assets or derivatives in order to maintain exposure levels. Ownership of crypto directly avoids those issues, while tax filing and reporting are more complicated. Owning crypto is another matter. Among the winners: accountants and software providers who now have a new asset to crunch the numbers. 

Owning crypto through a security, such as a stock, exchange-traded fund, or limited partnership fund, is a simple way to keep things simple