How Do You Maximize the Benefits of Cryptocurrency While Avoiding Near-Term Tax? Consider a Self-Directed IRA Comments Off on How Do You Maximize the Benefits of Cryptocurrency While Avoiding Near-Term Tax? Consider a Self-Directed IRA 2188

A recent entrant, iTrustCapital, provides free guidelines.

There’s no doubt cryptocurrency is beginning to look a bit like “kryptonite” when it comes to the IRS. For a number of years, digital currency was a bit of the Wild, Wild West in that most transactions happened outside the U.S. and beyond the purview of the Internal Revenue Service.

But no more. For several years, the IRS has sent strong warnings about the need to report the revenue from crypto trades on your U.S. tax turns. But managing these records is no easy feat. Simply ignoring the IRS on cryptocurrency trades is no longer an option as the agency has cracked down hard on offenders. So what do you do to ensure your reporting is accurate, and to be sure your participation in crypto isn’t causing you more in fees and taxes than the gains you may be getting are worth?

Thankfully, several software options have emerged to make virtual currency investments easier by managing and ensuring accurate reporting to the IRS.

But another option quickly gaining popularity is perhaps the easiest alternative of all:  making cryptocurrency investments within a self-directed IRA.

While it’s technically feasible to use a standard self-directed IRA to invest in whatever you wish, but creating a fund specifically geared for the characteristics of digital currency is the best of all worlds – an investment vehicle that mirrors the best of what has been happening in the traditional financial markets for years. By setting up an IRA that is specifically designed for cryptocurrency purchase and sales, you can invest in any cryptocurrency you wish, or in multiple, but as long as the funds stay inside of the IRA, no taxes are owed.

The central location (and the provider you choose) can help you be certain your taxes are property reported when the day for withdrawals eventually comes. Also, just like the traditional financial markets, having the funds reside in an IRA helps to keep your head in the right space of discipline when it comes to viewing and holding your investments as long term vehicles as opposed to feeling the need to “churn” your account and jump to new investment choices upon each piece of news, thereby losing an undue portion of your digital currency earnings to ongoing capital gains taxes.

One of the early and leading providers in this relatively new space is iTrustCapital, a proprietary online trading platform with a focus on educating investors throughout the investing process, along with providing them with the benefits of trading cryptocurrency within an IRA. This can be an exciting way to move forward on benefits such as the chance to jump in early on high growth offerings, as well as the obvious benefit of postponing, or even eliminating, tax obligations until the eventual point after retirement age the funds are withdrawn.

“We are regularly amazed at the number of people who are unaware of the benefits of IRAs,” said CEO Todd Southwick. “It’s not just those in their 20’s and 30’s but across all age groups when it comes to the lack of knowledge of the incredible tax benefits offered by investing through IRAs.”

“Our mission is to not only help those with existing retirement accounts but to educate the many thousands of people who don’t yet have retirement accounts about the tax-deferred and tax-free benefits of IRAs.”

For starters, Southwick points to the following four questions as important background to research carefully before moving your cryptocurrency into a self-directed IRA from iTrustCapital or elsewhere.

The Four Red Flags – proceed with caution:

  1. Is all pricing and fee information posted upfront? In the case of iTrust all information is posted on the website and easy to find.
  2. Is the representative you are working with a commissioned salesperson?
    • To find out, ask them directly and also read their client agreement, Southwick says. If the individual is not a licensed Financial Advisor are they giving you financial advice? According to regulatory requirements, they should not dispense this advice without having a proper certification and license for this.
  3. Did you find them on TV or through a high-profile spokesperson? Bear in mind that it is very expensive for an agent to advertise this way. Be sure it isn’t you who is bearing the cost of these fees.
  4. How liquid is the investment – Can you buy/sell 24/7?
    • Do you have to speak to someone to do so?
    • What is the settlement time? 

In all, self-directed IRAs may be one of the best advances to emerge in the cryptocurrency space. But before you move your assets over, be sure to investigate the organizations you are considering as the IRA with care.

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Tina Mulqueen is the founder of The Block Talk and the CEO of Kindred PR. She consults with blockchain projects on marketing and public relations strategy, helping clients to secure more than $10M in funding. She is a 2x Top 100 Women in Media honoree and was named one of the top young communications professionals by INC Magazine. She's an advocate for women in technology, and often speaks about the intersection of technology, media & marketing. She writes regularly for Entrepreneur, and has written for Forbes, Huffington Post, Today, Thrive Global, Elite Daily, New York Lifestyles Magazine, and more.

Fidelity to Offer Bitcoin in 401(k) Retirement Plans Comments Off on Fidelity to Offer Bitcoin in 401(k) Retirement Plans 48842

The move is the first for a major retirement plan provider and may signal more widespread adoption of the cryptocurrency. 

On April 26, Fidelity announced its intention to add a Bitcoin investment option to its 401(k) retirement plans. Employees of businesses that pursue the option will be able to allocate as much as 20% of their contributions to Bitcoin, all from the company’s main investment dashboard. According to reporting by the Washington Post, Fidelity said that at least one employer has already signed up for the option which will launch later this year.

“Fidelity’s leadership, especially CEO Abby Johnson, has been at the forefront of institutional Bitcoin and crypto integration for years and is no stranger to the space, with Fidelity’s private equity and venture capital arm being a major source of capital for crypto miners, crypto SPACs, crypto hedge funds and more,” says Eric Lamison-White, Director at STS Capital Group LLC, a cross-border advisory and investment firm. “It is completely in character for Fidelity to steadily and cautiously extend access to their working class customers as the regulatory climate becomes more productive.”

Critics suggest that the volatility of Bitcoin poses an unnecessary risk to a retirement portfolio. It’s a reasonable argument. At the time of this writing, the cryptocurrency’s price has fallen by more than 6% just today. Meanwhile, at $37,978 it’s a far cry from Bitcoin’s high of $68,000, representing more than a 40% drop since November 10th of last year. 

However, advocates of cryptocurrency’s long-term utility disagree.

“Cryptocurrency is a reliable, long-term store of value because it cannot be corrupted by central authorities,” says Lisa Carmen Wang, founder of The Bad Bitch Empire, a platform for female investors in web3. “We’ve already seen hyperinflation, bank failures, and other egregious disasters happen in the last few years, so trust in governments is at an all-time low. Crypto is inevitably volatile now because it is an early stage high-risk/high-reward investment, but for those who believe in the values of a decentralized economy, crypto is an attractive long-term investment that people should consider having in their portfolio.”

Regardless of your appetite for risk, the notion that savers will be able to easily manage contributions to Bitcoin in a respected retirement plan is meaningful.

As of last year, 63% of US adults that did not hold crypto were curious about it. Many people in the crypto-curious category don’t invest because they simply don’t know how. There’s a technological barrier to entry that can feel daunting. 

When you have major retirement plan managers like Fidelity making it easy to add Bitcoin to a portfolio through a dashboard users are already familiar with, we may see this group start investing in the asset class, moving digital currencies further along toward mainstream adoption.

How a Thief Stole More Than $1M in NFTs on Instagram Comments Off on How a Thief Stole More Than $1M in NFTs on Instagram 109

A common use case for the blockchain is reducing fraud. Shouldn’t that mean it’s impervious to hackers? Not necessarily. Here’s how a hacker was able to amass more than $1 million in stolen Bored Ape Yacht Club NFTs.

For any of us that have received a nefarious link in our emails or on social media that encourages us to input private information, we’re already familiar with the logistics of phishing. A hacker sends us a link, usually under the guise of a brand or person we recognize, and asks for personal details like usernames, passwords, or bank details that aid them in assuming our identity or assets. 

It’s precisely what happened in the case of the Bored Ape Yacht Club hack which was announced on Twitter Monday morning. 

A hacker was able to take charge of the official Bored Ape Yacht Club Instagram profile, and sent a communication to followers claiming to be offering an “airdrop,” which is a term used to describe a free token giveaway. (Note: it’s not clear at this time how the hacker was able to login to the official Instagram, in the first place.)

Users were asked to link their wallet to benefit from the airdrop, which made their mobile wallet susceptible to the hacker and resulted in the transfer of multiple NFTs, presumably including four Bored Apes and a number of other NFTs minted by the Bored Apes creators, Yuga Labs.

The hack illuminates a glaring problem in the NFT market. Namely, MetaMask, the popular wallet application, only supports NFT display on mobile which is less user-friendly than the platform’s browser extension leading to mistaken transaction approvals.

What’s the solution for NFT holders? “MetaMask with Ledger,” according to Adryenn Ashley. “NFT holders need a wallet that gives them the ease of MetaMask with the security of hardware.”

The hack is a reminder that even though the blockchain has the potential to overcome fraud, users still need to be mindful of third party applications that manage their data. 

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