Bitcoin is a digital currency dating back to 2008, and being relatively new, ways of dealing with it are often changing. Worldwide and even within the United States, there is debate about whether it can be considered an actual currency. However, even though it is new, bitcoin transactions are considered tax events and therefore are subject to taxation in the United States. Let’s look at what this might mean for individuals who are filing their taxes and who own or have received this new form of currency.

If your employer pays you in bitcoin, you might, for example, earn $2300 a month in dollars and $200 in the best bitcoin wallet. Income as bitcoin valued in dollars would be taxed in the usual way, regardless of the new form in which the dollars appear. it may also be taxed as self-employment income.

As for ownership, trading or donation of this digital currency, it is treated as property or capital gains so you would be filing for capital gains taxes. This means that you would want to keep track of its value in the local fiat currency. This can be a complicated process, although there are now tax professionals who can work through this with you.

Where the Best Bitcoin Wallet is Taxed

An interesting aspect of tax filing for digital currencies defined as capital gains, is that you can make money on a trade, so that if you buy $400 in this digital currency and sell it for $500 you have made $100. There might be no taxation or fees if this trade occurs within one year and your income is below a certain level. In any case, such a trade should be declared on your tax return. You may also take a loss in an exchange and receive tax benefits as you would from any capital gains loss.

Your Bitcoin wallet is subject to government taxes

Your Bitcoin wallet is subject to government taxes

On the downside, there may be fees associated with the transfer of your best bitcoin wallet into dollars, and the process of determining the value of the bitcoin can be complex. Things to consider would be – when you made a trade, what the exchange value of the currency was at that time, whether to consider it short-term or long-term assets, whether you have gained or lost in a trade, whether you have traded one alt-currency for another. Again, tax professionals can help a lot with this.

Specifically, in the United States, you would use Schedule D of the 1040 form to declare trades of your bitcoin wallet. If you made $2500 dollars on a sale of BTC, you would declare this as income. In general, the IRS expects you to declare all trades with bitcoin, no matter how small. How long you have held the BTC would, however, be a factor in determining your tax rate.

How is bitcoin taxation handled in other countries? You would be surprised to learn how much variety there is in countries worldwide in terms of how cryptocurrency taxation is handled. In October of 2015 the European Union decided not to tax digital currency, so it is exempt from the VAT (Value-Added Tax) there. In China, bitcoin is very popular. The Chinese citizen has the right to own bitcoin, but banks are not permitted to exchange BTC. It’s not clear whether bitcoin is taxed, but if it is, most likely it is taxed as an asset. The same thing is true in Norway, where bitcoin would be taxed as property under the wealth law.

Because digital currency is a newcomer on the scene worldwide, countries vary greatly in terms of their perception of its legality, and some nations have assumed that bitcoin users have criminal intent. As the use of cryptocurrency grows, however, it becomes clear that it is simply another valid and lawful medium of exchange. In general, worldwide, it is legal and of lawful to trade with bitcoin. It may be considered barter, and it may be defined as wealth or capital gains.

There are only a few countries that have partially banned it, one example being Iceland. Others have tried to ban it but without a lot of energy, as its use is growing. Tax regulations, it seems, have not kept up – or not yet kept pace – with the growing use of digital currencies. As one reddit user put it, such exchanges are by definition lawful, even if they are not regulated or taxed. Where it is taxed, as we see in the United States, the business of taxation is exceedingly complex. Nevertheless, the latest regulations suggest that trading with bitcoin in any amount is taxable.

After the not so recent shutdown of Coinaaa, we’ve partnered up with an Ethereum wallet provider online. We’re looking to give users freedom to choose a better alternative to both Bitcoin and Coinaaa.

Advantages of Ethereum

So why is this online currency so good? Simple. Because of its developers. They build important applications, and more than just online ethereum wallets. Vitalik has written an incredible source code base for the cryptocurrency, bringing it to the $1 Billion market cap we have today. It was an extremely undervalued coin for most of its lifetime so far, but has recently been catching up in value. Indeed, smart contracts and decentralized applications have spurred a new wave of customers to invest in the currency. Innovation truly is important.

Any Cons?

There aren’t any major cons to Ethereum, besides the recent hard fork drama. What happened was a user used a technique to extract a large amount of DAO from the currency, and took 10% of all coins. Vitalik and the crew fixed this, but had some resistance from users who wanted Ethereum to fail. Hence, there now exists a hopeless but pricey coin called Ethereum Classic. In a few months, no one will remember anything about the hard fork and Ethereum issue anymore. It was a necessary action to take, and Vitalik and his crew made the right decision.

Thank you, Vitalik

Thank you, Vitalik

Again, this brings us to the major point of how important it is to have active and strong developers on the platform. Vitalik saw an issue, and quickly addressed it. Despite how huge the issue was, he handled it very well and made the right decision. Why in the word would anyone invest a coin in which one person exploited a bug and took 10% of all the market? This would make Ethereum and ethereum wallet literally instantly fail.

Cryptocurrency development is about building new ideas, and changing the world. During that process, it is an absolute truth that mistakes and bugs will happen. But we have to push through them in order to lead the world to a better, more decentralized place.

Sponsorship

The guys at ethereum wallet have reached out to us about a sponsorship opportunity. Since we love Ethereum so much, we gladly accepted the offer and are now partnered with the site. This is very reminiscent of the NASCAR sponsorshipwith Josh Wise. Except instead of cars, we’ll be fully promoting the very trusted and secure online ethereum wallet!

Ethereum-Wallet is a pretty fantastic service

Ethereum-Wallet is a pretty fantastic service

With speedy hot ethereum wallet transactions, you’ll be flying around in no time. Transactions barely take milliseconds on the epic cloud server. Need security? Cold wallet storage is just around the corner too! Users will be able to generate and store private keys on their machines, allowing for ease of use and a healthy dose of security.

Founded by the team behind Just.Ice, Ethereum-wallet will be revolutionary in the cryptocurrency scene. They will be leading the development of a series of high-tech decentralized applications in the Ethereum space, allowing for even more applications to be built on top of the platform.

Private Public Key Storage

Your private key holds the secret to your funds. Your public key is like your address which people can send coins to you with, except they cannot remove funds from your address. The private key is safely encrypted on the server, or on your own desktop or flash drive.

As mentioned above, users can soon download their private keys from their online ethereum wallet and store all their Ethereum digital currency online, but offline. Simply go to the cold wallet section of the website in the dashboard, and generate a public private key pair. You may notice that the process is a bit more complicated than the hot wallet (default).

We have decided to implement a limit on how many Coinaaas that can be sold each month for 2014. The limit is set to 20 Coinaaas each month. If there is a higher demand for Coinaaas than 20 Coinaaas a month, the public market price will increase. You can read all our pledges here.

100% IS STORED AS COINAAA’S REAL ASSETS

We have made a change to our business model. Instead of 89%, we are now storing 100% of the sell price as Coinaaa’s assets. Instead we are taking a fixed fee of 600 NOK per conversion, no matter how much a client buys or sells. This is also being implemented on the first batch we sold.

COINAAA IN THE NEWS

We have been featured in Coindesk and CryptoCoinsNews.

In the month of June 2014, we halted sale of Coinaaa because we found an e-money business law in Norway that may concern Coinaaa and Coinaaa AS. We immediately hired two business lawyers of the well known Norwegian law firm Torkildsen & Co that investigated Coinaaa and the current e-money law in Norway. They found that Coinaaa and Coinaaa AS, in its current form as a cryptocurrency, is most likely not regulated by the present laws. Even though Coinaaa and Coinaaa AS may not be affected by the e-money law, I asked the lawyers to send a formal letter to The Financial Supervisory Authority of Norway for a proper clarification.

Our main goal is to have Coinaaa be regulated in a safe and sound way. If it turns out that The Financial Supervisory Authority of Norway tells us that we must have an e-money license, follow the Norwegian laws of e-money businesses and the guidance of Ministry of Finance, we would be one more step closer to our ideal business setup, a fully legal and regulated cryptocurrency. On the other side, if they tell us that we are currently not regulated, then we will continue as we are and keep staying in touch with the authorities for possible collaborations.

The main goal for Coinaaa is to create a legal, safe, and stable cryptocurrency with verified users. That is currently something that is missing in the cryptocurrency community and something that is much needed if the masses should adopt cryptocurrencies.

We are looking for investors

If we are told that we need an e-money license to operate, one of the main hurdles is the 1 million euro in initial capital that is required. We are willing to offer shares of our business for investments. We believe Coinaaa is much needed in the cryptocurrency community, and we will therefore do anything (as long as it is legal) to make it a success. Coinaaa AS may even be re-located to another European country if that will boost Coinaaa’s progress (we are now located in Norway).

We are only looking for investors that can invest 50 000 Euro or more in the venture. If you want to join the secret and encrypted list of interested investors in Coinaaa AS, and can prove that you have more than 50 000 Euro to invest in the venture, please send an email to aaa (at) coinaaa.com with the following info:

  • Name
  • Email
  • Phone
  • Business (if business)
  • Address
  • Country
  • Euros to be invested
  • Proof of the Euros that can be invested (ei. print screen of a bank account, BTC holding, other)
  • Percentage you want of Coinaaa AS for the investment (just a pointer for us, not binding for you)

This information will be confidential and not binding. We will only go forward with this if (when) we are required an e-money license. We will then provide you more information on the business. In the meantime, we operate as before.

Regards,

Jonas Borchgrevink

CEO of Coinaaa AS