Learn the myths about cryptoPhoto by Traxer on UnsplashCryptocurrencies are continuing to be a hot topic these days. With the price of Bitcoin and Ethereum have skyrocketed in the last year, investing in cryptocurrency has become a highly lucrative venture, but there’s a lot more to it than just sitting on your couch and hoping that they’ll go up in value.The article we’re looking at today will dispel six common myths about cryptocurrencies:Coinbase is the safest way to buy and sell bitcoinCrypto companies in the U.S. can now legally go public without fear of federal oversight because blockchain businesses are regulated by the SEC if they operate under specific standards. Peer-to-peer Coinbase and Nasdaq helped open the floodgates for crypto trading on mainstream markets, making them industry innovators.On May 11, Coinbase’s first-quarter earnings report revealed that surprising losses had reached $519 million. Furthermore, their monthly users numbered only 19%. A selloff ensued, and it battered Coinbase even further.When the report was released, a shocking announcement stunned industry insiders.Coinbase explained that the cryptocurrency stored in its user accounts could be part of its bankruptcy proceedings when the exchange goes bankrupt. Their owners will probably be regaled as general unsecured creditors, and there is a big difference between crypto and cash.The FDIC can’t insure such assets since they’re not tangible items stored in someone’s bank account and can’t go underwater or heist away easily.Cryptocurrency exchanges are known to be unstable — meaning they can shut down or go bankrupt at a moment’s notice, even if your digital assets were kept serviceable. There is no guarantee that these assets will stay the same. They could crumble in an instant without warning.The Hidden Cost Of Alleged Unregulated CryptoUnfortunately, as a publicly traded company, Coinbase can only comply with what the SEC enforcing permits. Despite this impact, on May 8, the SEC announced that it was doubling the staff it used to protect investors in cryptocurrency markets.The $1.2 trillion bipartisan infrastructure bill, President Biden’s signature legislation late last year, seems to include a new tax-related crypto regulation. It also makes mention of the federal government considering its digital currency and enhanced Stablecoin regulations are all but specific shortly.100% Anonymity No Matter What Crypto You’re UsingYet another early turnoff for traditional investors was bitcoin’s association with criminality and the internet’s dark corners. Crypto was always so popular with seedy elements of society because it’s anonymous — users can conduct private transactions that banks, governments, and law enforcement agencies can’t trace.Authorities showed that they don’t have to make a big starng in crypto trading patterns to differentiate between legitimate and illegitimate use. With most transactions, the moment of exchange is when cryptocurrency is converted into fiat currency. The use of cryptocurrencies just isn’t linked to the individual user’s identity.For law enforcement’s convenience, a transaction is permanently recorded on the blockchain. Along with those illicit transactions, techniques and technologies have often improved, making it more difficult to track any funds that may make their way into terrorist hands. This sentence rewriter can make basic sentences more concise or less wordy.Cryptocurrency is a clean and green way to make moneyMaking paper is one of the world’s most time-consuming, environmentally-destructive, and expensive undertakings. Trees are harvested, then they are chopped down and often treated with toxic chemicals. Resources such as metal, ink, or dye must be mined.Many people believe in the myth that cryptocurrency exists only in a digital blockchain and is, therefore, environmentally sustainable.Cryptomining uses massively energy-intensive proof-of-work to create cryptocurrencies such as Bitcoin. Cryptocurrency miners have consumed tremendous amounts of electricity and computing power, causing environmental destruction and draining business resources.Bitcoin Offers More Than Just A Great InvestmentFrom the beginning, bitcoin investors had to contend with volatility. The ups and downs were intense and sometimes agonizing for those passionate about cryptocurrency.Recently, an advisor named NextAdvisor came out saying that it was time to move on from this volatile digital asset because, in all honesty, it wasn’t an excellent outlet to invest your money in.If you’re using bitcoin, when making a payment of $3 for a coffee, the value of the share of bitcoin would only be $30. In that same month’s time, it could only be worth $27. That would have been your loss for that week.Gains from Bitcoin, Ethereum, and other cryptocurrencies aren’t taxed anywhereThere’s been a lot of speculation on cryptocurrency tax laws. Most people think that since no identities are being used in the transactions, they don’t have to recognize gains and losses. That couldn’t be further from the truth.Yeah, that would be perfect.The reality is that crypto is treated as property by the IRS. When you sell, trade, or otherwise dispose of your holdings, you pay taxes on the gains and can deduct losses similar to your gains on stocks or Amazon shares. Unlike stores, most exchanges calculate short-term capital gains as a percentage a year. It makes it easier to track progress in skill building and produces more accurate income data.Check out our new platform 👉 https://thecapital.io/https://twitter.com/thecapital_iohttps://medium.com/media/3b6b127891c5c8711ad105e61d6cc81f/href6 Myths Debunked You Probably Believed About Cryptocurrencies was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

From Canva Pro83b elections, as per the Internal Revenue Code (IRC), states that an employee or founder has the option to pay taxes that are due on the grant of stock-based compensation. Stock-based compensation is a form of incentive based on the company’s equity. Incentives such as stock options and restricted stock. ESOP and performance shares are a few forms of stock-based compensation. The purpose of stock-based incentive compensation is to increase the retention of employees and higher productivity.As such, 83b election has been incorporated by the IRC to pay taxes on the fair market value of the stock-based compensation. From reducing tax liability to increasing tax benefits, the 83b election is a great instrument for individuals who receive stock-based compensation. However, the consequences of the failure to make the election can be significant and may lead to a substantial tax penalty. In this article, we will understand the concept of the 83b election and the consequences of not filing the election.83b election and penaltiesUnder IRC Section 83b, an employee or a founder can elect to be taxed on the stock-based compensation at the time of its vesting. This means that an employee or a founder can choose to pay taxes on the taxable event instead of spreading it over future years. It is believed that this election will encourage the employee or the founder to exercise his option of deferring taxes. This is because the stock-based compensation will reduce their tax liability over future years. As such, within 30 days of granting stock-based compensation, the employee or a founder must file the election with the Internal Revenue Service (IRS). However, an additional tax penalty may be imposed if the time to make such an election is missed and it is not filed. Be sure to check with a tax professional before filing the 83b election in order to avoid the tax penalty. In this regard, election reporting is required to be filed with the IRS within the specified period.Understand 83b electionThe Internal Revenue Code (IRC) of the United States Section 83b stipulates that an employee or a founder can elect to be taxed at the time of obtaining the stock-based compensation. This means that the employee or a founder can make the election within 30 days of the stock-based compensation being granted. With this provision, an employee or a founder will have to pay taxes on the stock-based compensation’s fair market value (FMV). The concept of the 83b election is to minimize the tax liability in the process of granting stock-based compensation. Well, it is suggested to hire a tax professional to guide you through the 83b election. Thus, you will have to comply with the rules of the election and filing requirements.How does the 83b election work as a compensation tax strategy?According to the Internal Revenue Code (IRC), 83b election can be effective for any stock-based compensation grant. The tax strategy of the 83b election is to minimize the tax liability that an individual would have to pay as a result of their stock-based compensation. In this regard, assuming that the value of the stock will increase over time, the long-term capital gains can be applicable in the future.However, the 83b election will give the employee or a founder the right to pay taxes on the initial grant of stock-based compensation. In this light, the tax liability will be reduced. Furthermore, if the income reported is low, filing 83b elections can benefit the individual by reducing the tax liability and increasing the tax benefits. Therefore, in the process of applying for the 83b election, you must keep an eye on IRC and its requirements.Why should you file for the 83b election?If granted stock-based compensation, an employee or a founder may be liable for the taxes on the stock’s fair market value. The tax liability is based on the gain on the sale of the stock in question. However, this tax can be lessened by filing the election with the IRS within 30 days of the granting of the stock-based compensation. Paying taxes on the grant at the fair market value instead of paying on the value at which the shares are later sold is a great tax strategy. Likewise, the long-term capital gains can be saved by making the election, which is one of the benefits of the 83b election. Hence, as mentioned, the 83b election is a good tax strategy for individuals who are granted stock-based compensation.When to consider filing an 83b election?Typically, anyone who is granted stock-based compensation will be liable to pay taxes on the fair market value of that stock compensation when it is vested. However, since the tax liability will be lower as a result of filing the 83b election within 30 days after the stock-based compensation is granted or exercising an option to purchase said stock-based compensation, this method is worth considering. The details of the 83b election, including the letter, form, and documents, should be duly signed and submitted to IRS under the given time. It is recommended that filing for the 83b election is done after you have consulted a tax professional to avoid any unnecessary delay.What happens if you don’t file 83b election?If you do not file the necessary documents in connection with the 83b election within 30 days of the stock-based compensation being granted, the election missed will place a burden on the company. It will be required to value newly vested stock-based compensation, which will incur increased expenses. As such, a new report will be formed, which will be submitted to the Internal Revenue Service stating the total value of the stock compensation.In addition to that, a penalty may be levied on the company for failure to file 83b election. Moreover, if you fail to file the 83b election within 30 days of exercising an option to purchase said stock-based compensation, then it is highly likely that you will lose your rights over that vesting date. Overall, it is essential that you research the requirements of the 83b election and follow them accordingly.Possible disadvantages of 83b electionNow that you have understood the 83b election and its benefits, it is time to mention the disadvantages of this tax option. As a result of filing the 83b election, the following are a few disadvantages that could hinder the success of the 83b election;1. In the case an employee leaves the firm before the completion of the vesting period, the taxes paid as a result of making the 83b election will not be refunded. In other words, you will not receive any refund even if you are no longer granted company shares.2. The 83b election allows the employee to recognize ordinary income on the date of grant, which could change their taxable brackets. In fact, this recognition of ordinary income could be increased due to their compensation packages.3. Though there is no guarantee that an investment will increase its value, filing for the 83b election means that you are betting on the stock’s appreciation. If this does not happen and the stock’s value decreases, an 83b election cannot be revoked or altered.The important consideration to look for to file 83b electionWhile knowing how to file an 83b election is essential, it is equally important to consider a few important factors. Hence, it is imperative to study the stock’s market value when filing for the 83b election. In this context, ensure you know the number of shares that will be granted on the vesting date. Likewise, you must look at the fair market value of the shares, which will give you an idea of how much tax liability you will have to pay. In addition, all the necessary documents signed and submitted to the IRS should be duly presented. In order to successfully file the 83b election, it is important to be aware of all the potential implications of the election. By understanding each step involved in filing for the 83b election, along with looking at the conditions of the election, you will be able to formulate a well-thought-out plan for filing for the 83b election.ConclusionIn conclusion, filing for the 83b election plays an important role in determining how you pay taxes on your stock-based compensation. It is important to note that the tax strategy is beneficial only if you carefully study all the forms and conditions of the 83b election. Likewise, determining your tax liability and doing an in-depth analysis of your situation is crucial. Most importantly, the consequences of the 83b election must be fully understood to avoid unintended consequences. Hence, if you are granted stock-based compensation, then before signing an option or acquiring said compensation, it is recommended that you consult a tax professional for help with your 83b election.Check out our new platform 👉 https://thecapital.io/https://twitter.com/thecapital_iohttps://medium.com/media/3b6b127891c5c8711ad105e61d6cc81f/hrefConsequences of not making 83b election was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Protocol Ventures, a crypto fund of funds that invested in the likes of Multicoin Capital, Pantera Capital and Electric Capital, is reportedly shutting up shop. The post Crypto fund-of-funds Protocol Ventures is shutting down: Bloomberg appeared first on The Block.

While some have compared Bitcoin to a tool of war, it is more like a defensive weapon that protects those who use it from authoritarianism and overreach.