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    Form 56 Appointment of Fiduciary

    Uploaded by

    John Medina
    1) Moving cryptocurrencies between exchanges like moving Bitcoin from Coinbase to Kraken is not considered a taxable event. 2) For tax purposes, the owner of the private key is viewed as the trustee of the funds, and any realized gains would need to be reported by the trustee to the IRS. 3) Only when cryptocurrencies are sold back into fiat currency like US dollars is there a tax implication, as the realized gain or loss is measured in the change in dollar value from when the currency was acquired to when it was sold.

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    Form 56 Appointment of Fiduciary

    Uploaded by

    John Medina
    614 views1 page
    1) Moving cryptocurrencies between exchanges like moving Bitcoin from Coinbase to Kraken is not considered a taxable event. 2) For tax purposes, the owner of the private key is viewed as the trustee of the funds, and any realized gains would need to be reported by the trustee to the IRS. 3) Only when cryptocurrencies are sold back into fiat currency like US dollars is there a tax implication, as the realized gain or loss is measured in the change in dollar value from when the currency was acquired to when it was sold.

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    explanation how to serve form 56 on public officials

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    1) Moving cryptocurrencies between exchanges like moving Bitcoin from Coinbase to Kraken is not considered a taxable event. 2) For tax purposes, the owner of the private key is viewed as the trustee of the funds, and any realized gains would need to be reported by the trustee to the IRS. 3) Only when cryptocurrencies are sold back into fiat currency like US dollars is there a tax implication, as the realized gain or loss is measured in the change in dollar value from when the currency was acquired to when it was sold.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    614 views1 page

    Form 56 Appointment of Fiduciary

    Uploaded by

    John Medina
    1) Moving cryptocurrencies between exchanges like moving Bitcoin from Coinbase to Kraken is not considered a taxable event. 2) For tax purposes, the owner of the private key is viewed as the trustee of the funds, and any realized gains would need to be reported by the trustee to the IRS. 3) Only when cryptocurrencies are sold back into fiat currency like US dollars is there a tax implication, as the realized gain or loss is measured in the change in dollar value from when the currency was acquired to when it was sold.

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    You are on page 1of 1

    You can do your own research, but I just wanted to make this point.

    Some of you incorrectly


    believe that “gains” between cryptos are taxable. Let’s use the example of moving “your” Bitcoin
    from Coinbase to another centralized exchange such as Kraken. And let’s say you funded your
    Coinbase account with $1,000 of after-tax currency (USD). Assuming your principal doubled in
    value for example, you send $2,000 worth of Bitcoin to your Kraken exchange account to buy
    Litecoin (or even more Bitcoin for that matter). Now, let’s act as if there is a taxable gain here
    and we arrive at the end of the tax period with this gain. The owner of the private key is the de
    facto trustee, being that you are the grantor who funded the account, and it is the trustee in this
    situation which has realized the gain. If it is in fact taxable, then the trustee must report to the
    IRS and remit the proper tax payment. Remember, this is before going back into fiat dollars.
    This is a very easy test to demonstrate why exchanges between crypto-graphic currencies,
    tokens or other assets is not taxable. Let’s say you, the grantor in this example, then move your
    $2,000 worth of Bitcoin back into your dollar account at the bank. There is a presumption of an
    income tax liability. If the correct accounting were reported, you would have a tax on your gain
    of $1,000; likewise, if your $1,000 was reduced by 50% because the dollar price of Bitcoin fell,
    you would be able to claim a loss and maybe even qualify for a deduction, in dollars. Why?
    Because you received a disbursement from the trust, which is taxable. This is nothing new, like
    I’ve explained before, the tax has always been there since we began taxing profits and gains,
    there is no new law needed to collect taxes from crypto-currencies. The tax falls on gains earned
    from buying low in dollars and selling high in dollars.

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