GMB Ep #143: The Back to Front of Cryptocurrency Taxation With Micah Fraim

Cryptocurrency as an investment is relatively new, especially compared to other investment vehicles such as stocks and bonds. Because of this, there is a lot of confusion and a lack of guidance around how taxation applies to cryptocurrency-based investments. This week on Grow Money Business, we are joined by Micah Fraim, a Certified Public Accountant who specializes in crypto taxes. Throughout the episode, we take a dive deep into the tax aspect of cryptocurrencies, NFTs, and other blockchain-based assets.

 

 

Show Notes

[02:01] Getting to Know Micah – We start the conversation with a brief look at Micah’s career and how he got into his current line of work in taxation for cryptocurrency.

[04:12] Taxation for Crypto – Micah dives into the limitations of our current tax system in relation to cryptocurrency and  virtual assets, as well as some of the attempts that have been taken to introduce legislation related to cryptocurrencies.

[10:45] Tax Basics – Grant and Micah discuss some of the most basic tax concepts related to investments and how they apply to cryptocurrencies.

[15:47] Opportunities – Micah shares some of the opportunities that arise along with a crypto bear market.

[25:31] NFTs – Micah explains the current tax code’s application to NFTs and how the wide range of use cases available for NFTs will call for more advanced tax rules.

[30:44] Play-to-earn Games – Micah shares his thoughts on how games are introducing new in-game economies and how they are connected to crypto investments.

[35:38] Tracking Crypto Transactions – Micah discusses how to track crypto transactions across multiple trading platforms for taxation purposes.

[42:06] Audit Risks – Micah dives into the risks that could arise from irregularities in crypto transactions that are reported to the IRS.

[44:41] Crypto as Payments – Grant and Micah discuss some important considerations for business owners who are accepting payments in cryptocurrencies and how it may affect business operations.

[50:00] Future of Crypto – Micah shares his thoughts on how cryptocurrency projects may evolve in the near future, as well as how the regulations may be adjusted to match the innovations in the crypto space.

 

 

Resources

GMB Ep #123: Tax Efficient Crypto Gifting With Pat Duffy

 

The world of cryptocurrency is innovative and ever-expanding. In today’s episode of Grow Money Business, we are joined by Pat Duffy, a cofounder of The Giving Block. The Giving Block is a platform that enables non-profit organizations to receive cryptocurrency donations. Throughout the episode, Pat and Grant dive deep into the tax benefits related to crypto donations, and discuss how The Giving Block is changing the future of charitable giving.

 

 

Show Notes

[03:14] The Giving Block – We start the conversation with a brief look at what The Giving Block does and how it helps donors and non-profit organizations.

[07:10] The Process – Pat walks us through the process of what happens when someone interested in crypto gifting signs up with The Giving Block.

[10:00] Donor Advised Funds – Pat explains the process of donating via a Donor Advised Fund.

[16:33] Why Crypto? – Pat shares his take on some of the reasons why non-profit organizations may want to take crypto donations.

[19:05] Barriers – Pat discusses some of the challenges non-profit organizations face when starting to accept crypto donations.

[27:30] Getting Traction – Pat shares with us what it was like at the beginning of his service and what it took to get enough traction for the service.

[31:30] Business Model – Pat shares with us how the business model of the Giving Block works and some of the areas the platform will be expanding into in the near future.

[36:52] Managing Growth – Pat dives into their strategy of managing their growth.

[42:54] Shift4 – The Giving Block was recently acquired by the payment processing solutions company, Shift4. Pat shares what opportunities and possibilities this acquisition will open up.

[49:10] Tips for Donating – Pat shares some advice for those who own crypto assets and want to make a crypto donation.

 

Resources

GMB Ep #118: DeFi State of Affairs With Matteo Binfarè

 

Decentralized finance (DeFi) is an emerging system of financial products and services built on blockchain technology. It utilizes secure distributed ledgers similar to those used by cryptocurrencies. In today’s episode of Grow Money Business, we have an insightful conversation with Matteo Binfarè, a professor at the University of Missouri. He teaches his students about investments, pensions, endowments, and decentralized finance. Throughout the conversation, Matteo imparts his insight and years of experience in decentralized finance and cryptocurrency.

 

 

Show Notes

[02:33] Decentralized Finance – To kick off the conversation, Matteo defines decentralized finance and discusses its current state.

[07:13] Cryptocurrency – Matteo shares his thoughts on the impact of cryptocurrency.

[10:34] Asset Class – Matteo shares his thoughts on whether cryptocurrency deserves its own asset class.

[13:28] Web 3.0 – Web 3.0, the next avatar of the internet’s world, is a technology capable of understanding and interpreting the concept of data on its own. Matteo explains Web 3.0 is and how it works.

[19:11] Governments and Bitcoin – Matteo discusses a variety of government viewpoints and regulations surrounding bitcoins.

[23:49] Smart Contracts – Matteo defines a smart contract and outlines its potential applications and benefits.

[26:25] Matteo’s Story – Matteo shares his background and journey thus far.

[32:03] Asset Allocation – Matteo expresses his thoughts on whether or not cryptocurrency deserves a place in most people’s portfolios, as well as how much an individual should consider allocating to it.

[43:47] Institutions – Matteo explores how institutions are approaching cryptocurrency and allocating resources.

[47:43] Research and Studies – Matteo discusses his research studies and plans to study cryptocurrencies and DeFi formally.

[24:59] Hazards – Matteo points out some key risks to consider while investing in cryptocurrencies.

 

Resources

GMB Ep #111: Diving Into Crypto With Tim Picciott

 

Cryptocurrency has been one of the most popular topics in the financial media in the last few years. It is a transferable digital asset or digital form of money exclusively available online based on blockchain technology. My guest today, Timothy Picciott CFP® CRPC®, Wealth Advisor in Innovative Advisory Group, is a pioneer in cryptocurrency wealth management solutions. He works with Bitcoin and cryptocurrency early adopters to give innovative financial planning solutions, enabling them to pay a minimum tax on their highly appreciated asset as legally possible, while also educating crypto fans on investing in “Crypto IRAs” through self-directed IRAs and 401(K)s.

 

 

Show Notes

[03:19] Tim’s story – Tim shares details about his career and how he came to be in his current position.

[10.48] Fiat Currency – Tim expresses his thoughts about the evolution of fiat currency.

[14:41] Bitcoin and Blockchain – Tim elaborates on his views on Bitcoin and blockchain technology.

[16:57] Opinions – Tim discusses the significance of studying Bitcoins properly and thoroughly.

[22:11] Double-Spend Problem – Tim explains Bitcoin’s potential of solving the double-spend problem.

[27:58] Tech Aspects – Tim goes into greater detail on the technical aspects and benefits of Bitcoin.

[31:00] Electricity – Another objection leveled with Bitcoin is the electricity required to mine them. Tim evaluates the effect of power on bitcoin mining and the resulting implications.

[34:43] Smart Contracts – Tim discusses how smart contracts enabled by blockchain technology have the potential to transform lives.

[36:00] Geopolitical Implications – Tim shares his insights on current world trends along with his take on the US and China’s movements on Bitcoin.

[46:59] Future of Bitcoins – Tim goes to great length on his predictions for Bitcoin’s future.

Resources

Connect with Tim: 

Website: thelibertyadvisor.com/

Website: innovativewealth.com/

LinkedIn: linkedin.com/in/timothy-t-picciott-cfp%C2%AE-crpc%C2%AE-547b0b8/

Instagram: @the_liberty_advisor

Podcast: The Liberty Advisor Show W/ Tim Picciott: podcasts.apple.com/us/podcast/the-liberty-advisor-show-w-tim-picciott/id1238430499

Mentioned in the episode: 

Ep #107 – Central Bank Digital Currency: Dangers & Possibilities with J Scott Christianson: growmoneybusiness.libsyn.com/website/ep-107-central-bank-digital-currency-dangers-possibilities-with-j-scott-christianson

GMB Ep #107: Central Bank Digital Currency: Dangers & Possibilities With J Scott Christianson

 

Money has taken a lot of different forms over time, including gold & other metals in addition to fiat paper currencies. It’s arguable whether bitcoin and other decentralized currencies are the next version of money. What’s clear is that governments around the world are in an arms race to create their version of “centralized” digital currency. In today’s episode of Grow Money Business, J Scott Christianson joins us to describe central bank digital currencies, the arms race to create them, and potential uses and misuses in the future.

 

 

Show Notes

[02:44] Digital Currency – While digital currencies have become relatively recent mainstream phenomena, they have existed for decades. Scott discusses this new endeavor of developing digital currency.

[07:28] Adopting Digital Currency – Scott highlights the gravity of adopting digital currency in a country by assessing its dangers and possibilities.

[10:39] Transition – Scott outlines how moving from a conventional reserve system to digital money works logistically.

[13:37] China and Digital Currency – Scott broadly talks about China’s stance on digital currency from various angles.

[19:37] China and El Salvador – While China prohibits bitcoin transactions and mining, El Salvador accepts Bitcoin as legal tender. Scott shares his perspective on this schism.

[23:36] Role of USA – Scott discusses the options that the US may have in its arsenal to delay China’s deployment of programmable money.

[28:25] Banking System in the Future – Scott discusses the potential of more authoritarian counties attempting to implement controlled digital currencies, and his predictions for the global banking system in five years.

[35:23] Fiat Currency and Cryptocurrency – Scott shares his thoughts on that intersection between fiat currency and cryptocurrency.

[40:42] Artificial Intelligence – Scott briefly discusses artificial intelligence and his predictions for where it will go in the next five to ten years.

[48:48] Life with AI – Scott shares what applications he believes AI will enable in the following years.

 

Resources

Connect With Scott: 

Website: christiansonjs.com/

Newsletter: frtech.substack.com/

LinkedIn: linkedin.com/in/jscottchristianson/

Instagram: instagram.com/jscott_mo/

 

 

Mentioned in the Episode:  

China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa:

goodreads.com/book/show/18373202-china-s-second-continent

Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth and How to Fix It:

goodreads.com/book/show/36204377-edge-of-chaos

GMB EP #101: Bitcoin ETFS Are Here

 

Bitcoin ETFs are here.

They’re not quite what you might think though. We walk through the details of how these beasts are structured and what you need to know before buying them in this week’s podcast episode.

 

 

Show Notes

[02:09] Recent Developments – Grant starts the discussion with a review of how and why cryptocurrencies grew in popularity over the last few years.

[04:37] Diversity of ETFs – How the diverse nature of the ETFs allowed them to utilize cryptocurrencies and the challenges associated with getting a cryptocurrency involved in a mainstream investment vehicle.

[08:12] Newcomers to the Market – Grant reviews a couple of newly introduced ETFs that are backed by Bitcoin and the pros and cons of investing in these compared to a traditional ETF.

[10:48] Futures Contracts – How the futures markets work and how they relate to the way crypto-backed ETFs function.

[14:36] Obscure Costs – Because of the way BTC-backed ETFs are connected to futures contracts, there are some costs involved in the process that may go unnoticed. Grant explains what investors need to keep in mind about the costs of the Bitcoin ETFs.

[16:41] Leveraged ETFs & Mutual Funds – Grant shares his thoughts on the functionality of the two investment vehicles and the similarities they share with Bitcoin ETFs.

[20:10] Bond Funds – Grant explains the difference between how bond funds operate versus investment vehicles based on futures contracts.

 

 

Resources

The Wall Street Journal – ETFs Are a Bad Way to Bet on Bitcoin:

wsj.com/articles/etfs-are-a-bad-way-to-bet-on-bitcoin-11635261745

 

The Wall Street Journal – Bitcoin ETF’s Success Could Come at Fundholders’ Expense:

wsj.com/articles/bitcoin-etfs-success-could-come-at-fundholders-expense-11635080580

GMB Ep #97: My Current Thinking on Cryptocurrency

 

A lot has happened in the cryptocurrency arena since we last covered this topic on Grow Money Business. Last week China announced that they are banning all activities in cryptocurrency while a month ago, El-Salvador announced that it would accept Bitcoin as a legal tender. In today’s episode, Grant shares his current thoughts and observations on cryptocurrency-related developments in the United States and around the world.

 

 

Show Notes

[02:46] Recent Events – Grant starts the conversation by briefly explaining the impact of both China and El Salvador’s approaches to using cryptocurrency.

[05:17] Benefits of Cryptocurrency – The benefits of cryptocurrency and why it is an appealing and convenient alternative for existing currency issues.

[07:05] Growing Chinese Economy – Grant compares the pace of China’s economic growth to the USA and reviews its intention of overtaking the USA as a world economic power.

[08:50] World Reserve Currency – Grant dives into the world reserve currency from numerous perspectives, including economic privileges that it opens for certain countries and why the USA needs US dollars as the world reserve currency.

[12:45] China and Cryptocurrency – The cryptocurrency activities in China before the government-imposed ban and Grant’s take on the reasons behind that government action.

[14:46] El Salvador and Cryptocurrency – El Salvador’s economic background and impacts on the country’s social context by encouraging citizens to transact in Bitcoin.

[15:52] Benefits and Challenges for El Salvador – The possible future occurrences related to cryptocurrency, as well as Grant’s take on the probable risks and benefits El Salvador may experience with the decision to accept cryptocurrency.

[18:40] Future Cryptocurrency Approach of Countries – The future measures of the world, and how China’s recent decision has knocked the price of cryptocurrencies.

[21:00] Increasing Credibility and Viability of Cryptocurrency – Grant explains the widespread adoption of cryptocurrency at the institutional level and how it has enhanced the credibility and viability of cryptocurrencies.

[22:58] Bitcoin and Ethereum – Cryptocurrency consists of numerous types of coins, including Bitcoins and Ethereum. Grant reveals his thoughts on the benefits and usage of each.

[28:01] Conclusion – Grant sums up his takes on recent changes of monetary and economic policies related to cryptocurrency and how countries will decide and set rules regarding cryptocurrency in the coming future.

 

Resources

Ep #65 – My Take on Bitcoin & Cryptocurrency

growmoneybusiness.libsyn.com/website/ep-65-my-take-on-bitcoin-cryptocurrency

Ep #64 – Where to Invest an Extra $50,000 Right Now

growmoneybusiness.libsyn.com/website/ep-64-where-to-invest-an-extra-50000-right-now

JPMorgan Warns Big Investors Are Suddenly Dumping Bitcoin for Ethereum Amid A $150 Billion Crypto Price Crash:

forbes.com/sites/billybambrough/2021/09/26/big-investors-are-suddenly-dumping-bitcoin

China’s top regulators ban crypto trading and mining, sending bitcoin tumbling:

reuters.com/world/china/china-central-bank-vows-crackdown-cryptocurrency-trading

GMB Ep #95: We Have a New Tax Bill [And It’s a Whopper]

 

The House Ways & Means Committee recently released proposed tax reform legislation that brings major changes to the current levels of taxation, including reversals of several provisions introduced in the Tax Cuts and Jobs Act of 2017. We dedicated this episode to exploring what this new proposal includes and some of the key aspects of the proposal that may interest our listeners. Throughout the episode, Grant dives deep into proposed provisions related to retirement, new tax brackets, business tax, tax on cryptocurrency, estate planning, and more.

 

 

Show Notes

[02:19] Background and Progress – Grant starts the conversation with a brief review of what led to this new proposed piece of legislation, its current status, and the path to getting it signed into law.

[08:16] Roth IRA Conversions – The proposed tax bill calls to prohibit Roth IRA conversions on after-tax contributions, which has been a very convenient maneuver for tax planning. Grant shares his thoughts on what to keep in mind if you’re considering a Roth IRA conversion.

[12:35] High-Income Earners – The new tax bill also brings provisions to restrict high-income earners from doing any Roth IRA conversions starting from 2031. Grant dives into the reasoning behind this, why this provision is proposed to come into effect ten years from now, and some other restrictions that apply to high-income earners.

[16:27] Mandatory Distributions – How the proposed new legislation mandates taking money out of your retirement accounts if the total value of all your retirement accounts exceeds a given threshold.

[20:00] Tax Brackets and Rates – Grant dives into how the tax brackets and applicable tax rates are updated in the proposed legislation and proposed changes to taxation on capital gains.

[27:47] Ultra-high Income – Grant shares his take on the 3 percent surtax proposed to apply for people who make over $5 million.

[29:47] Surtax on Trusts – The proposed legislation also brings provisions to add a surtax on trusts. Grant talks about the proposed tax brackets and rates related to trusts and what you should keep in mind when considering estate planning.

[31:08] Business Tax – How the proposed tax bill affects businesses depending on the type of business entity and some of the planning opportunities that emerge with the new proposal.

[35:35] Business Income Deductions – The new proposed legislation reforms a set of provisions related to business deductions that are introduced in the Tax Cuts and Jobs Act of 2017. Grant explains some of these reforms and what business owners should keep in mind about tax planning.

[39:02] Cryptocurrency Assets – Some of the tax-related legislations that apply to other assets such as stocks and bonds do not currently apply to cryptocurrency assets. Grant shares his thoughts on how that may change in the new proposed tax bill and what crypto investors show know about the new tax bill.

[42:26] Estate Planning – Another provision in the proposed tax bill brings some significant changes to taxes related to estate planning. Grant dives into what these updates include and what you should keep in mind about taking advantage of the current thresholds and exemptions.

 

Resources

https://waysandmeans.house.gov/media-center/press-releases/chairman-neal-announces-additional-days-markup-build-back-better-act

GMB Ep #81: There Are Only Three Ways To Make Money In Crypto

The popularity of Bitcoin and other cryptocurrencies has exploded over the last few years, and many investors are asking about the various ways they could make money investing in them.  A few months ago in episode 65, we talked about how cryptocurrencies work. In today’s episode, we’re extending that discussion and sharing the only three ways to make money with cryptocurrencies. Throughout the episode, Grant reviews how some of the money-making methods of the gold mining era relate to cryptocurrencies and three methods you can use to make money in the cryptocurrency space.

 

 

Show Notes

[02:11] Understanding Cryptocurrency – Grant reviews a framework that he’s been using to shape his understanding of the inner details of cryptocurrency and the ways to make money in the cryptocurrency world. 

[06:45] Risks Associated with Crypto – Compared to rare minerals like gold, cryptocurrency does not have a long history yet. Grant explains the risks associated with cryptocurrencies due to their relatively short history and the high volatility. 

[07:46] Process of Mining – Grant takes an in-depth look at how a network of computers carry out cryptocurrency mining and transaction tracking.  

[12:52] Profitability of Mining – Why the awards for mining go down over time and how it affects the ROI of mining. 

[15:45] Speculating – How cryptocurrency investors can make money by speculating cryptocurrency prices. 

[18:11] Regulations – Grant reviews some of the regulations that are in effect in Europe due to the highly volatile nature of the cryptocurrency world and some of the instances that prove that cryptocurrencies aren’t completely out of the reach of governments. 

[22:47] The Levi’s Approach – How investing in platforms that enable people to interact with cryptocurrencies can become a way to make money in the cryptocurrency arena. 

[27:32] Smart Contracts – How smart contracts work, how they’re related to the technology used in crypto, and some of the investment opportunities related to smart contracts. 

 

Resources

 Ep# 65 – My Take on Bitcoin & Cryptocurrency: 
growmoneybusiness.com/podcast/episode65

Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #65: My Take on Bitcoin & Cryptocurrency

Last week Bitcoin crossed $58,000 per coin. This extremely volatile digital currency has been becoming increasingly popular and getting more media attention than ever. Despite the scrutiny that comes with popularity, the technologies and concepts involved in Bitcoin are fascinating. We dedicated this episode to diving deep into what cryptocurrencies are, how they work, and whether they could be good investments. Stay tuned until the end of the episode, where Grant explains what you should keep in mind if you have plans to get involved in Bitcoin.Continue reading