cover of episode What You Should Know About Crypto Taxation

What You Should Know About Crypto Taxation

2021/9/27
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Episode Summary:

Tokens talked about on the show:

Bitcoin, Sushi, ADA,COTI, Chiliz,Zilliqa

Guests:

Ricky Lavina CEO of Taxfyle )

https://www.taxfyle.com/)

Resources:

IS ETHEREUM A GOOD INVESTMENT?)

Meet The Hosts:

Brian Moir

Solidity and React Developer | Blockchain Enthusiast | Decentralized Internet Advocate | Crypto investor since 2012

https://twitter.com/moirbrian )

Logan Ross

Blockchain Analyst @ Benzinga | President @ Wolverine Blockchain | Crypto investor and educator since 2016

https://twitter.com/logannross)

Ryan McNamara

Bought sub $90 ETH during the bear market | Liquidated on ByBit | Was into DeFi before it was cool | Ran ASIC mining operation in 2016 (sorry planet Earth) | $UNI Bag Holder

https://twitter.com/ryan15mcnamara)

Disclaimer: All of the information, material, and/or content contained in this program is for informational purposes only. Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial adviser before making any investment decisions.

Unedited Transcript

Hello, zinger nation. Welcome back to flight 50, aboard the moon or bust rocket. Ship your home for all things, all coins and defy. My name is Logan Ross, and I am piloting today's mission along with defy developer, Brian Moore and Ryan mutant, ape McNamara. How y'all doing. Doing good. Happy mute in Monday.

Uh huh. Are you just coming up with this now? Or is this a fake? No, it's a real thing. Oh yeah. What do you do on said mute and what do you do on set Newton Monday and some you and Monday you'd understand if you had them urinate, but if I wasn't a poor, I would get myself a mutant today's episode is brought to you by the numbers.

Uh, also before we can get started, I need to, to talk about some safety procedures, uh, on this rocket ship. So I need all who are willing and able seated in any of the rows to please activate their light button into the, on position to let other, uh, space travelers metaverse travelers know that moon or bust is where.

At, uh, also got to point out the Benzinga crypto YouTube channel in the description below. If you are here for the crypto content, then you should be there as well. We are going to start streaming exclusively from that channel as soon as it hits 1000 subscriber Rooney's so, uh, go over there and get in early, we'll be doing a giveaway to one of our.

1000 subs. When we hit that, mark, I'm thinking an ENS domain would be pretty cool as a giveaway, but I'm open to hear what you guys think, what you guys want as well. What's good. STBC nice to see you again. Uh, okay. So we also have a telegram channel and we got some sick moon or bust merge. See this, this dope eith hat right here.

Uh, if you join the telegram, we'll toss you a. 5% off discount code. Can't get that alpha anywhere else on the. All right with that out of the way, make sure to connect with us on Twitter as always come say what's up, our DMS are open. Uh, and also I want to remind you guys that we are going to try to start bringing on some of our best guests, our best viewers.

Uh, if you are here often in the comments, then hit us up. If you want to come on and we will make it happen. So let's get into the news for today. So I want to start with the chain link Cardinal. Partnership. This is huge for the blockchain space in general. I think mostly for chain link. We'll see a lot of that value from ADA, uh, flow into chain link and it will connect it to Yves, polka dot all these other dope ecosystems.

So it's good to see that Cardona is integrating, uh, with chain link. Uh, I, you know, I have positions in both of these. I think it's good news. For both assets, Ryan, what do you think about this integration? Yeah, it's definitely interesting. I like your point, Logan. I think it is more bullish for chain-link than it is for ADA, because chain-link is going to be multi chain now to a degree, you know, it's, it's diversifying the risk for chain link.

Now, if a theory ends up failing in some hypothetical scenario, then chain link can still survive. Unlike most tokens on Ethereum's network. If a theorem were to fail, then mostly these tokens that are on Ethereum. We'll fail with it. But now that chain link is integrating with Kurt donno. It has another avenue to kind of diversify risks.

So I agree with you, Logan. This is very bullish for link. I think it's also very bullish for Cartano. It's very important to have an Oracle on a network and there's no one better than chain links. I think this is bullish for, for both ADA and for chain-link dope. Brian, do you have any additional thoughts on this partnership?

No, I think it's going to work really, really well for them. I mean, chain-link is integrated into a whole. Uh, set of projects that you wouldn't even under, wouldn't even realize they are. And the amount of like technology and data you can get back from channeling is astounding. So I think it's really exciting.

So does this mean that that chain link will be on Kardos network as a Cardinal token? Uh, I guess that would make sense. Yeah. I mean, I would assume they would eventually have that, but really, I think they're just running a node, which they can integrate it into Cardona so you can get data from. Yeah. I mean, I don't think they'll mint, new tokens that are like eight, a formatted.

They might move over a bunch of them. And they also might try to switch link over to like a chain link based token or asset, which, uh, would be pretty cool as well. Uh, what's up, Zolty see you out there in the chat doing what. I hope you're doing well. Also, you see, STBC, uh, is down to come on, talk some NFTs with us.

Uh, that would be pretty cool. Uh, so let's set that up, brother. Uh, okay. So next up, Ryan, I think you have this piece of news. Yeah, man, you got to pull up open. See you gotta see this diamond hands NFT investor who made $2.8 million on a single NFT in a matter of months now he didn't even have thousands of dollars.

He had $100 and he, he made that into $2.8 million on a single Cromey squiggle and Ft. Talking about money. It's about 20,000 times return on his investment. Not person. It's about 2000000% return on his investment. Okay. So I have Z pulled up here. How should I go about finding this? Should I just go to our blocks and look forward in the squiggles?

I would, I would go to the squiggles look under recent sales and scroll down until you see a 945 E trade. Then 945 ether equates to about $2.8 million. Just over that off of a $100 investment. That's ridiculous. So this is the second crummy squiggle we've seen sell for over $2 million this week, which I think is incredibly bullish for chromium squiggles.

We've seen the floor go from about eight or nine Eve. Now it's up to about 13 and a half Eve. So over 50% alpha on Ethereum alone. I'm excited to see where this project goes. I've been watching it for a while and I think it's only going to be going up right now with these super high sales for these rare chromium.

Very cool. Okay. So I have my screen share now live on this screen and this is sorted by recently sold. So, uh, uh, if you could just point out key rainbow boy, that's his name? He's chunky and very rainbow. That was chunky.

Uh, recently sword. Hey, the floor price is only what, 1.45 is that what it said? Yeah, but that's for all of our blacks, right? So our blacks has a ton of different collections. You have to filter it by a certain collection to sketch here. She is the chunker herself.

So Ryan, can you tell us a little bit about art blocks and about Cromey squiggles? Why this one is so valuable compared to the other ones? Yeah. So crummy, squiggles, I'm pretty sure it was actually the first collection of NFTs on art blocks and art boxes, almost like an art house for NFTs. They curate collections and they have a few different segments.

So art blocks curated is kind of like the most coveted NFTs in the art Black's collection. They also have a few other things. Art blacks Playhouse for some experimental art and a few other different things. But chromium squiggles, you see them all over crypto Twitter, lots of high-end NFT investors are getting into these and they're algorithmically generated pieces of art.

They're pretty cool. And I mean, some of them will sell for 10 to 15 Eve, but then you go up to these rare different types of traits with these crummy squiggles, and you can get into the millions of dollars now, as we've seen. That's crazy and look at it. It moves. I know. Tell the masses crummy squiggles move.

So this guy's zonked here. He, uh, was clearly very early in art blocks. Let's see what else he's got in his collection.

Minted that crummy squiggle. And like I said, it was about a hundred dollars on it nine months ago. Wow, man. Why didn't you tell me about that? I thought I did, man. Put any Cromey squiggles that man don't let me down again. Okay. Okay.

Interesting. Not really, honestly so far. Not really. Well, I guess he doesn't really have to care about really much for quite a while. He's getting, he does other art, blacks too. I mean, that's what you see. A lot of these blue-chip NFT collectors are collecting art blocks, Ponce and board apes. And we should also talk about cool cats.

Uh, well, we're talking NFTs. This became the third project. Hit a ten eighth floor just yesterday. The hype surrounding them is pretty crazy right now.

Yeah. I wanted to get one a while ago, but I never pulled the trigger. I saw the potential, but at the same time, it sounds corny. I didn't really like the art, right. I didn't buy it. I didn't like the art. And as with a lot of those early NFTs, we see them increase in value. I think that a pudgy penguins could be next.

I think they're sitting around three to 4, 8, 4. I haven't checked lately, but we saw those gains some hype early on, same with cool cats. And now we see them appreciating even more. Now I'm thinking the, the whales is secret society of Wales. That's, that's my, I do own a few of the, a few of those, and I'm hoping that those will be the next ones, a hype.

And there've only been three NFT projects to hit the 10 eith for first it was crypto punks, then it was board apes, and now it is cool cat. So it'll be interesting to see what the fourth project to hit that 10 eith four will be. Cause there's more it in it's going to be inevitable that these blue-chip NFT projects will get more and more.

So speaking of big money spent on the Ethereum blockchain, uh, this morning, uh, Bitfinex, the exchange made a little oopsie, uh, and while transferring a hundred thousand dollars of tether, they spent, uh, let's see. $23.7 million on gas. So you guys thought you were paying a lot of gas fees? Uh, not, not quite as much as Bitfinex.

Not really sure what went wrong here. They must have not set a limit, uh, and some sort of loop, maybe in a smart contract caused it to just burn and burn and burn. So they spent $23 million in fees to make a single hundred thousand dollar, uh, transfer of USD T. Oops, woopsy they probably half of that got burned, at least.

So, you know, maybe that affected the theory. I'm just a little bit, it was like a, it was really sad compared to the right. I know my inner mate with a lot of money, then let's say a minor does some sort of rig got paid handsomely. Oh, man. I hope it was mine. I see you have here on the, uh, on the dock, a hundred thousand dollars in tethered, $23 million.

It's this the future. Sure France. I, I hope not. Uh, okay. So we have a lot of stuff going on in the fungible token market, a lot of movement. Uh, we saw a weekly close yesterday. The one that we have been talking about for months, uh, but we will get to all of. After the interview. So today we have the CEO of tax file on, uh, with us today to talk about crypto taxes, uh, and how, um, tax file, you know, places itself in the industry.

So I'd like to welcome to stream Ricky. Levina. Thank you so much for joining us today. Hey guys, what's up? Not too much. Uh, so before we really dive into it, could you tell us a little bit about your background, uh, how you started tax filing? Sure. So I'm a, I'm a CPA. Uh, before I started Taxol, I worked for PricewaterhouseCoopers.

Um, and then some, some, some regional firms, but I'm a, I'm a CPA, I'm an accountant. And about, I'm sorry for the voice, uh, about six years ago started Taxol and my two co-founders, um, basically trying to democratize, uh, the supplies. Uh, things, uh, in the accounting industry, meaning I got a license, my CPA, or you could be an IRS enrolled agents.

Uh, but basically you have your, your county license and, uh, in the olden days you just had to go to a, to an accounting firm and the pay via W2. Right. Um, but I felt that our licenses were worth something, you know, uh, out in the market and, um, You know what thought it'd be really cool if we create a platform that will route jobs, uh, to them.

So, you know, Taxol is a, an app where you guys y'all could download it on, on, on iOS and get your taxes done, uh, directly through it, uh, via a CPA like myself, I'm not on the app, I'm saying I'm a CPA, but, uh, but we also, uh, route work from like institutionals. So if someone's outsourcing their accounting department or a CPA firm is.

Tight, uh, with, with, uh, with staff, which is a big trend over the past 12 months. And we think it's only gonna get worse now. Uh, they put all this work on, on the platform. And so, uh, our algorithm prices out all that work on an individual basis, uh, kind of works like match.com, um, based off, you know, there's different types of CPAs, right?

So if you specialize, let's say crypto taxes or something like. Uh, you'll get, you'll get matched up with these jobs. You'll see exactly how much you'll make on it. And, and by when you gotta do it by. So, um, that's a little bit about tax volume. Hmm. Awesome. Ricky. So I understand you're interested in crypto as well.

Yourself. Could you tell us why our audience of mostly crypto investors might be interested in using tax file? Uh, especially with the latest things going on in DC. No, it seems like crypto they're really hell bent on at least in the federal level to treat crypto as a security. Right. And, um, not all platforms, especially, you know, for, for your type of audience are, are, you know, using Coinbase and, uh, and their wallet, uh, you know, we're, we're using, you know, you know, Swiss products or, you know, uh, uh, Singaporean products and, and, and that could really fall through the loopholes.

Right. Uh, cause when you deal with. How crypto is trying to be treated in terms of, uh, from a tax position. Uh, you know, once you exit a position, right? Let's say you're moving from BTC to, to ease that now becomes a realizable event. And we don't really think about it, especially, you know, as, as you guys know, uh, let's say we're, um, you know, we're, we're, um, define, right.

And, uh, we're, we're collecting an interest and then. We decided to add some LP. Right? Uh, so, so we, we opened up a pool or we're in a pool or steaks and now, and now we want to, to get some action. You're getting interested in, in another one of the products on the website. Um, you know, you have, you have to track all these things and not all those entities are going to give you a tiny and I like Coinbase, right?

So it's not just when you move into. You know, and the government's pretty, at least they're saying they're going to be pretty serious about this. So it really helps to, uh, there's a lot of great apps out there, but it really helps to consult someone. Um, because given that. These platforms are in different countries and different transactions.

You mean different things. Are you moving, like you said, into a stable coin or are you, are you moving to something that's more volatile, right? Uh, you really have to be organized in terms of nutting out your gains and losses, and there's a ton of advantages there. So obviously Metta mask doesn't provide those tax documents like Coinbase does, as you said.

So what has been kind of the past method for reporting taxes, with defined Mehta mask events, uh, and what do you see as the better alternative that. Well remember, I just, I just supplied the people. So, uh, when you get linked up to one of our crypto pros, uh, they'll have their own software. Right. So similar to like Uber doesn't own the cars for the drivers.

Right. But depending on your complexity, our algorithm detects all. Yeah. This is a high-frequency trader or whoever. Right. As opposed to someone who just had one, you know, uh, one position in, on ether or BTC or light coin or something on their app. Right. Um, So, you know, that that's for Taxol could really help out from there.

It's, it's really consultative. Right. So, um, you know, you'll get matched up with your pro and you work through, uh, their software. They'll see, first of all, what you got, I think it starts really, um, you know, at home and being proactive on this stuff. So if you're looking to, you know, tax seasons, Not right around the corner.

Right. But we're getting closer to the end of the year. Or you may want to start getting organized, you know, ROC might be faced with a crap ton of work, uh, come January and you might have to extend and, and, and then you realize, oh wait, even though I had all these gains and if I'm extension, it's not an extension for payment, the IRS still.

Their money by April 15th. Right? So, um, we, we see that snowball for, for individuals, right? And, and the best thing they could do is, is, is work with someone. If you need help in advance to get organized or start getting organized yourself, because no one knows your, your, your crypto position like you. And, um, you know, and, and, and not, not, not even the best CPAs could look into, obviously w where, where you had realized.

So tell me about this algorithm you mentioned, is this a proprietary algorithm? Can it look through your meta mask transactions? How does it determine, uh, like the best fit CPA for you? So, um, I'll say it's, it's basically an intake form on our platform platform. It's called work layer that we use to power tax file.

And, uh, whether, like I said, it's, it's a crypto account or a 401k.

Question by question and start drilling into. Okay, well that didn't have a million transactions or, or was there one and in what, uh, in what platforms? Right? So on our end, it's, it's basically our job to find someone with that level of statistics. Right. And it's not want to say it's and it's the platform is doing and not, we don't have like an individual looking for coming through our 4,000 CPAs.

Um, you know, it's, it's someone, uh, that, that has has, you know, Some, some, I'm not going to prop up any tax, uh, crypto tax software, but they leveraged something in their, from that that really helps them out in terms of getting your schedule D uh, which is a schedule on 10 40 that you report, um, you know, all these transactions on and they could really help you, let's say net out your gains and losses.

Um, so that you're an optimal position. Okay. That makes sense. So what are some of the strategies you can use to lower your tax liability within crypto Korea? Or are there any, yeah, there definitely is. Uh, but, but it's all proactive, right? So if you have. Whatever happens in 2021. Right. And then you're trying to file your taxes.

Um, you're kind of limited, right? Because it is what it is. Uh, and, and, um, I would say that the, most of the best planning that we see cause cause there is no. Okay. So for you guys, uh, I don't know. You're familiar with. Okay. But before used to be like, oh, I'm training a light kind asset for another like-and asset.

And because I'm just rolling it forward from asset to asset the IRS, there used to be this gray area where you can say, okay, well that's not really a taxable event because I didn't get any cash from it. I didn't realize it. How am I going to pay taxes on something that I haven't gotten to cash from?

Right. Like, you're I have this basis of, you know, on paper to $12 million or whatever it is, but you know, my checking account only got 5,000. So how the hell am I gonna. You know, uh, a huge tax bill on that. Now with this new regulation. Um, it doesn't really matter. They're there, they're going to tax you for, for, for moving from asset class, asset class.

So that's why getting practice with this stuff is really important. You know, it may affect when you exit a position, right. Or when you switch from one point to another, if you need to go to. Um, USD, excuse me, or U S era tether or something like that, a stable coin, um, you know, and then eventually converted to, uh, to Fiat, you know, it's a pay your bill, but that's part of the planning, right?

So making sure that, you know, if you're going to attend any nine, this is going to be recorded as, as a game. Okay. Uh, I'm going to have this liability. Uh, the other part is. I know, I know everyone gets wrecked every now and then, uh, you know, I, I certainly have, uh, and we've been doing it for quite a while here at Taxol.

We've been trading, you know, for, for a few years, but, um, it's important to track all that because those losses offset your gains. Right. So, you know, don't, don't just think out of sight, out of mind, you know, onto the next one, you know, this is just a bad break record it, uh, because that would definitely offset, you know, Tax liability.

And are you able to write off gas fees as a transaction expense? That's a good point. Um, it depends on how you set it up. Um, so the IRS distinguish really between hobby and, and, and, uh, work, right? So let's say you have enough justification and it's kind of complex on, on determining this. It's more like I'm a lawyer.

Uh, you know, th that's making your case, uh, that you're a, you know, that you're doing this as an avid, this is your full-time job, right. As an avid worker, as opposed to just an enthusiast. Right. Um, this isn't something I just do in passing. Right. So, um, what that would trigger on your 10 40? Let's say, if you are active trader is.

Uh, which, which essentially means that on your 10 40, you have a schedule C or better yet, if you're incorporated now pros and cons are incorporated, you know, you want to track everything and, you know, and make sure that you're really on top of it all, because now you're incorporated and you're telling it to the world that you're trading crypto under this entity.

But the benefit are, yes, gas could be deducted, right? As, as, as cost of doing business, that's on your PNL. That's an expense, right? Obviously your, your. Your revenue on that business is your realized gains. Right. And on your balance sheet, right. Is, is the unrealized portion, right? So my long hole long-term holdings on a, on a position like ether or whatever.

Right. Um, so I would say if you qualify, you know, to do this as a legit business and, and the best way to do that. So as a Porter with the IRS, some corporate, even if it's just, you set up. Yeah, right. You know, uh, you know, coined Inc something and, um, I'm sure that's taken, I'm just giving you an example. And through that entity, you know, you, you log all your transactions and, um, if you do enough of it, you, you know, it may pass, uh, the test and want to talk about NFTs just shortly.

So our NFTs tax is the same way as other cryptocurrencies. So right now they're not. Um, but it seems like they're gonna move the way of being treated as any other security, you know? So, um, there's a ton of ambiguity. Uh, I think the, the funniest thing is that the people creating these slides, like before you get to NFTs, they, they, I mean, they don't even understand the blockchain, you know, proof of stake.

Like you talked to them about purpose. They can have no idea. So it's like, um, they're not even there. Uh, there's, there's a lot of gray area. I think it's, it's where we were in terms of general crypto tax laws, like four years ago. Like, how are you, how do we treat Bitcoin? Uh, so, uh, To be honest, there's just, you have to just take it situation by situation.

Right? How big of a profile is this in terms of, uh, you as an individual, uh, maybe working with a CPA, if you have a big, uh, profile here and a lot of the, you know, In my experience, not just in crypto, but just, you know, uh, consulting for clients and, uh, what I've seen, you know, through the tens of thousands of users that we have here, you know, attacks all, um, and maybe even hundreds of thousands of returns at the end schedules that we do every year.

Um, Is is, is taking a rational approach to it, right? Like, am I just blowing off millions and millions of dollars? I'm not going to, you know, be reporting here or really, you know, obviously that's illegal. Right. But it's like, okay, well, how big am I into NFTs? And how open, how, you know, you have an opportunity to get up front of it just because it's not tax season.

Doesn't mean you can make an essay, made a pain in our two, which, you know, ahead of time, which really. Um, to be in the good gracious of the IRS, right? Because let's say down the road, they make a mistake or you have to open up a case with them or something that happens to everyone, you know, mistakes happen and it happens pretty frequently.

Um, and. It probably happened to anyone, you know, by the time, you know, we're dead in the ground here, uh, you know, over the next 30, 50, hopefully 60 years. But, um, when that does happen, you want to make sure you have a clean record. Right. And that all that stuff that you're open and you're upfront with stuff, and you worked well with them and you got ahead of the payments.

So my follow-up question to that was can you claim losses for an NFT, say by selling it before the end of the year, if it loses value and then buying it back, I think you kind of already answered it. It's just not regulated enough, but, uh, do you have an answer for. I honestly, I don't, I don't. And, and, and here's the thing, they're not going to see it as an NFT.

They're going to see it as some type of acid, right. Whether it's security or another type of asset. Right. So that's why I said it depends case by case, you know, uh, your 10 40 is your, year's like a storybook. It's a, it's a chapter in your book, right. For the IRS, um, for that year. And, uh, depending on how all the narratives kind of string together depends on whether you're in a stronger weaker.

Interesting. So, um, you said that they're trying to classify NFTs as securities also. Um, what would be their motivation behind this? Maybe just collect more tax money, like I'm guessing fine art isn't, isn't considered a security and it's taxed differently, right? Uh, so why wouldn't they apply the same rules there?

Like I said, I just don't think, I just think that people that, that are, have running these laws and in, in this infrastructure infrastructure, bill just weren't focused on NFTs, like, or an expertise, right. They got, you know, their, their lobbyists from whatever institution, you know, it's definitely not from Coinbase or from someone that knows what's kind of what's going on.

Although they're having more presence, you know, in the industry, uh, whether it's a good thing or a bad thing. Uh, but. Um, it's probably someone from B of a right. Protecting their own interests. So, um, yeah, it's not really called on the new bill. Um, they want to classify th they throw this all blockchain stuff as they want to treat all blockchain.

Okay. As a security it's wild. I know. And I know that it could be true, you know, depending on what we're doing on blockchain.

You know, comparing apples to oranges, like, like in this case, in this example of NFTs. Right? So, um, that's, that's, that's where we're at right now. Uh, yeah, I think that, that if there would be a Silicon valley of cryptocurrency, the us is doing everything they can to push it outside of its borders. Uh, I think this is probably going to be detrimental.

For the, for innovation and crypto innovation, blockchain innovation inside the U S would you agree with that? Ricky? It's weird. I didn't try out for the 20th time band. Right. So I have no idea what's going on. Um, I really don't. It's tough. It's it's like, okay, well, are they just. You know, some people are saying they're trying to sink it so that they could buy low legal again, and then it farms, and then it's illegal for the 20, you know, for the 21st time.

Um, you know, so. I don't even think it's like 40 trusting it, to be honest with you guys. I don't think, um, like in terms of, I mean, this bill is in the trillions of dollars, right? Like just the bill itself. Okay. there, there's so much things pushed through this thing that it's not like it's a crypto bill, right?

It's it's it, it had his own little card out, you know, with its own, you know, group of lobbyists, uh, on it that had their opinion. They're obviously gonna. And try to get this, uh, uh, this, uh, the section on the bill in their favor. Right. Who, who knows what that is in terms of position, but, um, in terms of the U S trying to push crypto off shore, you know, I don't, I don't think they really care about that, you know, because they just saw China, you know, make it illegal.

So then, then when, I mean, Know Chinese, the most populated country. We'll try to do some self a crypto here. Right. You know, they, you, you, you guys all seen it on Twitter. Although the mining equipment being steamrolled by bulldozer and the CCP putting that out there. Right. So. I have no idea. I definitely know that, you know, decentralized decentralization and blockchain, you know, gives, gives power to the people and, and that's, um, that's why it's, it's a really hot topic, you know, and it empowers individuals like us and it's really, but also makes it really exciting.

Belly. So back to another question on taxation, are there any types of transactions in crypto that are not taxable events? Say maybe if I put my money into a smart contract, you brought up the example of maybe a liquidity pool earlier. If my money is in a liquidity pool and it's transferring between say Ethan Bitcoin is each one of those traction, a transactions, a taxable event, or is that considered something else?

Now? All those high-frequency stuff. Okay. Yeah. Yeah. So it sucks. I know. Um, yeah, it definitely sucks. So right now, the way that the realized gain is being realized, even though you're not moving to Fiat. Okay. At all, like. You know, it's, it's not like you're getting out your block five card and you're paying for something.

Right. Um, it doesn't matter. They're, they're treating that as the exchange of one asset to another, that ties back into my previous point about how they got away from like on exchanges. Right? In the past you could say that's a light kind of change an asset for an asset, but now no, they've been pretty explicit on that.

That's, that's a realized transaction. And depending on whether you're taking a loss on those micro transactions or game, all, getting that out at the end, That's interesting, especially for a program like Unisoft because they meant me. I provide liquidity on UNICEF and they made me an NFT. So really I'm holding the non fungible token, which has underlying assets in it.

And at any given time it could be chain-link or Ethereum, depending on the ratio between those two. It's constantly trading. So, I mean, to me, it just doesn't seem realistic for the government to ask for me to be like, realize all of these gains when I'm not really even realizing them. I just am holding a non fungible token that represents any given ratio at any time of these two assets.

Yeah. Um, I was, it was a Coinbase. I don't know who it was. Um, uh, but a few weeks ago on Twitter, they, you know, they were really going into, uh, the reporting requirement. That the brokers, because they're getting treated like brokers. Right? So, um, so this high frequency, uh, high frequency, but this liquidity pool, who is the third unit swap unit swap, are they based here in the U S uh, Unisoft labs is.

Yeah. All right. So they will be responsible for, uh, 10 89. That's going to be a disaster for them. That's why it's almost impossible for them really. And the overhead, the expense to just track all that and to sort that out and send it out in the liability that's associated with it. I think the liability is a real reason why Coinbase was being so vocal about this.

Um, because it's, it's nuts. It's crazy. So it's really on them. But the alternate responsibilities on you. So they have their own requirement, you know, that's why they were looped into this latest bill, right. The brokerage requirement and really anything over $10,000 has to, has to be tracked. So it's basically everything in a second.

Yeah, exactly. So anything over $10,000, they got. All right. Um, the government's trying to put this, uh, responsibility on them because they think that'll add pressure to you guys, right. Or to us. Right. So then report, because if we know it's being tracked that Coinbase or something, right. Um, what happens is on there on a 10 99, they give you a copy, but.

Uh, you know, side of it goes to the IRS, right? So, uh, once that's done, then you're like, oh, well I gotta report this now. Right. So, so that's the whole spirit behind the law. Um, obviously without diving into the practicality of interesting. So the units will have protocol is decentralized with the unit swap labs team operates outside of the U S if I was in their position, I would just like go to The Bahamas or go somewhere outside of the U S boundaries.

And then their problem is solved. Uh, well, you know, the IRS are going to say no because technically, yeah, technically they, they need to report this. Right. Cause, uh, um, the certain, uh, knowing your investor, you know, we know this, you know, you know, anytime there was an initial coin offering ICO or whatever, right.

You know, you can't accept someone from the U S and you know, some of crazy rules right on, on the brokerage, you know, knowing your investor, uh, type stuff. Um, technically they still have the responsible. Hmm. What about say you're running a trading bot and, um, you know, you're trading almost, you know, just as quickly as a liquidity pool, but you're, you're using a third party software.

And then on something that allows it like Coinbase pro or all that stuff. So you're pretty much saying that every single transaction, no matter what you use or how you do it, that's tax just like how a stock is. That's doesn't matter, which it doesn't matter which program now it's, it's, it's all treated like the security and, uh, you, once you exit a position, that's it, that's, that's what the training is a taxable event.

It doesn't mean when you come back from, you know, the realm of, of, of crypto into Fiat, it doesn't matter anymore whenever, any exit of any position. And then if let's say you're just doing defy, right? So let's say. I don't know I'm DePaul. I got it. All right. So, uh, probably cat or Becca or something like that.

Let's say, let's say, you know, you just staking there and you're earning interest. Right. But that's your only position, right? You came in with Fiat, right. With USD in my case, right. That went to tether and then tether. I used to swap on Q coin for. Yeah, or something like that or for Kai and then kind of tobacco.

Okay. Forget about all those micro-transactions leading up, which technically will be taxable events, but there's not really a holding period gain or loss there. Cause I'm just swapping one for one. Uh, once I move into backline and I start earning interest on it, that's, that's essentially taxable interests.

Right. So my base is. Right. My basis isn't and the, and let's say, you know, usually obviously with defy, you know, the, the value of the coin actually goes down, but let's pretend that the value goes up. Right. And you want to exit that position, right? Well, unless you exit that, that, that Beko coin to something else, like higher or something like that.

You're not going to get taxed on, on it's. Cause it's unrealized. Right. But the, but the interest is, so your earnings is cause that's paying now, right? So you have two. Technically report that obviously, you know, I don't know what that goes out of, but I don't think it's the U S um, and they're not gonna issue a Tahlia nine.

So, I mean, kind of go look with that or reconciling all that. Yeah. I think a lot of people, a lot of trainers myself and. Pretty much anyone we've talked to you're talking about are going to have kind of a really big eye-opener when it comes to next year's taxes. I mean, last year I did my taxes for crypto and everything, but you're kind of, a lot of people were confused and there wasn't as many rules, but now people are gonna flip, you know, it's just going to be kind of a little overwhelming.

So we have people, you know, hire professional to actually look at it and say, That's why we have tax file. That's right. Yeah. It's like, it's, it's a process. You guys, you and your listeners should have, try to get out of, to be honest with you, um, you know, start planning and think about what happened this past year in terms of just start with what projects were you in, right.

And how. That could be perceived by these guys. All right. By the IRS, you know, so it wasn't earning interest. Was I, you know, what was I doing? What was it? Was it just simply trading, you know, on Q coin or something. Right. Um, and then think about all the transactions you made. That's why you hold there. Um, think about all the transactions you made and then, um, Yeah, don't take your gains and losses and then start working with someone, um, to see, okay, well, we should really should start paying on this, right?

Because even if you have an exit, a position, but you're earning interest on something, you still have to make probably quarterly payments on it. Right. Like I said, just when you, cause you extend your tax, your tax form, your filing deadline, right. The IRS is always going to want their money. Right. So, so when you, oh, All right.

Uh, they want you to start paying and at the end of the year, right, the fiscal year is over for them. Right. You're going to have a balance due, right. So you have to start planning as to how you're going to pay that. Obviously, then they're not going to take crypto Fiat, but take USD. Right? So you have to probably think about what you want to exit to be liquid enough to don't have to pay that bill, if you're lucky enough to do.

You know, obviously on the, on the right side of that, on that ledger, you could obviously have a loss and then that's great. That'll go against your regular earnings. Your, if you have another job or something never been wanting a loss more than right now. Uh, so Ricky, I'm sure we'll be in touch. Uh, I'm sure you have, you have experts.

I'm assuming for all these defy NFT crypto tax. Yeah. Yeah, we definitely do. So if you just go to tax law.com sign up. All right. Cool. Thank you. Um, and, and you'll get connected. You just answer some simple questions and then you can start consulting with a CPA and they can help be your therapist to the whole process, right?

For no extra charge. All right, guys. Uh, this was Ricky. Levina the CEO and co-founder of tax file. If you guys are deep into. Maybe a little bit too deep, like I'm realizing I am right now. Uh, make sure to check out tax file link in the description below. They can get you hooked up with an expert so you can get on top of your taxes this year.

Ricky, thank you for joining us. Exactly. All righty. Hope you guys enjoyed that interview. If you're just tuning in. Now we did a little bit of news earlier and we are about to do our market update and moon or bust at the same time. So, uh, we're gonna start off with a couple of cryptos that we picked out, uh, and then we will pass it to you, drop your coins and your NFT projects that you're looking at in the chat.

Uh, and we'll pull them up, do a little market update for you. Uh, let's get it started with some BTC and some, a theory on the classics. Give me a second to pull up trading view. Ryan, is there anything else you've been looking at this week that you might want to take a peak into? Um, I wouldn't mind looking at sushi swap since I have been buying some of that up over the past week, but definitely Bitcoin, since everything follows Bitcoin and Ethereum would be good too.

And we also saw a unit swap plus 25% yesterday. Uh, so we'll have to check that one out as well. Please work, Mr. Trading view.

Okay. So here we have Bitcoin USD pair, uh, through the BitMEX exchange. Uh, and what we saw, uh, is a weekly close right around this bull market support ban that we've been talking about for months now. So. Watching last week, uh, we said the most bullish scenario would be to, uh, close the weekly candle right around this line.

And. Sunday, as we went into the close, we saw a huge rally right to the line we've been talking about. So a little bit, uh, called it there. Uh, and we see this second, this new weekly candle forming, uh, it had a wick up, but now it is a little bit in the red, slight pullback this afternoon. Um, but I don't think we are in dangerous territory yet by any means.

I think this is still very, very, very bullish and I am prepared. For takeoff. Brian, what do you think? Yeah, I think that we pretty much called it and it kind of followed the exact supporting technicals. We laid out because you know, Bitcoin's not going anywhere. It's here to stay and people realize that, and I don't think it fell below 40,000.

Yeah, there's a wig just barely, but just a little bit below the bulls are definitely winning right now. At least it's seems we've tried to go down and break that $40,000 mark. And it seems like we are holding the line. Like Logan said, these next couple of weeks are definitely going to be definitive though for Bitcoin and its price going through the rest of quarter four in this year, I'm starting to get FOMO already.

Seeing us holding the slide now four weeks in a row. I think that's pretty strong support. And I mean, I'm scared that I'm going to be stuck in some Fiat currency and I'll have to be buying during the pump. But I mean, we have a couple more weeks. I think we'll see where it goes and I'll, I'll certainly be dollar cost averaging my position specifically into sushi for the upcoming week or a couple of weeks.

Maybe you should save some of that for your taxes, Ryan? No, I don't have any profits. Don't worry about it. Yeah. I've lost enough. You hear that? STC or IRS? Uh, okay, so let's pull up sushi since you've been talking about it so much, uh, I believe your thesis is show you, is that correct? Show you is definitely a big part of it specifically because they are paying very large dividends to sushi holders with show you NFT.

It's going to be 2.5% of the transaction feeds on the platform. Right now they pay dividends. They pay 0.05% of the transactions fees on the decentralized exchange. But I just, I really like my thesis is basically, I really like how they're adding value to the sushi token. They're finding different ways to diversify it, to pay dividends out to the sushi token holders.

And I also like how it's being actively developed and they're making new programs that really don't have anything to do with the decentralized exchange or making NFT marketplace. They have a token launch pad and they have a lot of other features. I think that'll do them very well over the one. Nice. So do you have a target price for sushi in the next couple weeks?

Not in the next couple of weeks, I've been trying to buy, whenever it dips down to around nine to $10, I'm trying to get an under that $10 is my average cost, because I think this could be a 10 X over the market cycle right now. There's about a $1.2 billion valuation. So 10 X would bring you up to 12 billion, which, yeah, that's a lot of money, but a lot of other crypto projects already have that.

I think fast probably. More than $12 billion in market cap. And I could see sushi overtaking eventually, uh, which isn't good for my bags, but it hopefully will be eventually once I, once I stack up the sushi. So you say, you think you can, uh, see sushi taking over a unit swap. Uh, it's hard. It's really hard to say.

I think there is potential for it because of all these different avenues that are being developed to earn dividends for sushi is tokens as well as all the different programs being built on sushi. But it's hard to say because I mean, you know, swap was out first and at the end of the day, sushi swapped did fork from union swap.

So. Some stigma there. Uh, and you know, the swap will definitely be going up with the markets. And if sushi, 10 X is then, I mean, you know, the swaps probably going to be going up quite a bit to probably not 10 X in, just because there's so much more capital that would have to be involved for, you know, swap to 10 X, then it would be for sushi because, you know, swap has such a higher market capitalization.

We might have one inch and offshoots like that kind of happened to yep. I have some one inch and I'm expecting that to do pretty well with the general markets. It's a Dex aggregator. So, I mean, it works alongside a lot of these other programs. Yeah. So yesterday we saw a uni rip from 17 books at the bottom to about $25 at the top.

I'm sure a lot of traders had a good day and just as many had an equally bad day. Uh, it's pulled back a little bit since then. Um, but it still looks like a breakout, in my opinion. I mean, you can kind of see this line here. Maybe not a breakout may be more of a fake-out, but we'll have to see the next two days next, next couple of days, uh, will be very telling, as Ryan said.

Uh, so Brian, you have anything you want me to pull up or should we go to this plethora of coins we have in the chat? Yeah, just pull up ADA for a second. Alrighty. So ADA also announced during their, um, Their car Dano summit 2021 summit that they are not only integrating with chain link, but also being the strategic partner for dish network who owned also has a subsidiary boost mobile.

So they are going during in talks where, um, I H okay. Uh, media, which is the company that brought us Cartano is I'm going to be helping them build things such as. The proof of coverage for cell phones or dish network, um, having your identity on the blockchain and having, um, uh, referral programs through Cardona.

So there's a lot of stuff going on there. I mean that overnight we'll bring, once that's implemented, we'll bring over nine to 10 million views. Over to the condo, blockchain over just like that. So there's a lot of, there's a lot of bullish movements here, even though they've been slow to run things out.

There's a lot of people that trust them. And, you know, we think that Charles Hoskins cause hearts, you know, should I say it kind of doubles it hot, hard skin sins is going to, um, actually make things happen. I mean, I I'm very, it makes me even way more bullish. ADA and Cardona in general than I have ever been.

And I've always liked it. So I'm pretty pumped about it too. This is smart contracts yet kind of, kind of. So what's a smart contract. You who needs them, apparently you don't apparently. Uh, okay. So speaking of Cardinal partnerships also chain link. We talked about this a little bit earlier. They are integrating with the car Dano network for Oracles into the real world.

Uh, this is going to be very bullish, uh, for chain link. And Cartano both. We see, uh, we saw some, some crazy price action. I think this might have. I actually know it was just released recently. So these are the weekly candles. It could not have been that one. Um, but yeah, I guess we're still looking for that breakout on this.

Uh, trading pay right here. There's gonna be a lot of stuff. That's going to integrate chain link into their technology and a lot of stuff that isn't even blockchain related to do. So, I mean, the weather service, the company that backed us, the weather channel weather, you know, they've integrated. So, I mean, there's a man there's only good news for a lot of these things to move in the future.

All right. What's up Jim Cruz. Uh, we got Coty here for you. Uh, this is a smart contract blockchain. I think it's an Ethereum competitor. Uh, and you can program smart contracts in any language, uh, on this chain. I think that's its selling feature. It's been a while since I really dove into this project, but we see it here in full on price discovery mode.

It has broken through, uh, that the. Actually, it looks like March was there all time high. Uh, and so we're going to look for this continued movement. I'm assuming, what do you guys think about this chart? I don't know much about it. Is it like a car TZ car Tessie, C R T S I, where you can write smart contracts in any language as well.

Maybe that's what I was thinking of. Yeah. Maybe I think Cody is a different project. Maybe we can pull it up on coin market cap really quickly just to do a quick fundamental on the platform. Yeah. I just brought it up. We should definitely go into it because I, yeah, you're thinking of car Tessy but this is a little bit different.

I personally. Yeah. Currency of the internet. That sounds right. Cody. I personally never buy into all time highs when I see this, which I mean, that's just my personal trading preference. I feel like there's a little bit too much risk to get in once we're breaking new, all time highs. But that being said, once you're in price, discovery, sentiment changes really fast and you could see huge gains still.

We saw that with Solano and we saw that with a lot of other cryptocurrencies, even just Bitcoin. You see that when we go up to new all-time high. You never see it just go up another 5% from the all time high that's when the mania starts and that's when you can really make big gains. But personally, I try to enter positions when there's fear in the market and not when there's FOMO, I find that works better and it's generally less than.

No, this is actually a pretty cool project. If you scroll down and see where they said, uh, what makes it unique is it allows you to, uh, create your own coins that are stable in price and take control of your finances and your data. And so you can pretty much turn this into really, however you would like it.

If you need a stable coin, if you want to make sure that you're creating something that gives you the best, you know, just control of everything that you do. That's pretty neat. I don't know what the new regulations for everything is going to happen with it or what, how that affected. But I haven't seen something like this.

Very cool. Uh, if you're just tuning in this is moon or bust your home for all things, all coins and defy right now, we're going over your token picks in the chat. So drop them down there. Uh, and well, your down there, make sure to drop us a like, if you are enjoying the content. Uh, okay. So next up we got chilled.

Uh, Jim Cruz again with another nice recommendation for us. So Chili's is like a sports, uh, integration network. So they have partnerships with a bunch of the huge soccer clubs over, across the pond. And now they are expanding into the U S they could see a boom in activity and price, and these, uh, you know, brand name recognition, uh, with all these U S partnerships.

This could be very bullish. Uh, zoom out a little bit. They are still a ways down from their all time high. Uh, so this might be a good one to get into. If you're not already, it looks like they had a little bit of a attempted breakout and shot back down on that China food. Uh, but do you guys know anything about this coin?

You want to add anything? I know it's a platform and teams can make their own fan tokens, which is an interesting concept. We don't really see it implemented in blockchain too much. I think chili is really has the market for this right now. And they have the biggest partnerships. So, I mean, in that sense with the fundamentals, I think it's a good investment.

I think the technicals look good too right now. Uh, it's down, I mean, 60% or so from all time highs. And if the market continues to go. Through quarter four, I could see chilies, uh, outperforming a lot of these larger market cap coins. No, they're also big with the, uh, soccer. Teams and fans. So it was more of an international thing than for us and a us thing, but it's pretty big in those areas.

So that's, that's a huge, um, influx of users that want, you know, those NFTs or have a token player. I mean, a players token or all that kind of stuff. So I think there's a lot of room to go with this one. we got crypto maniac in the chat, shout out, Matthew Stafford. He also wants to know about so far. Is this similar or no?

So, uh, no, so far as a centralized lending platform where you can give them your coins and other people will borrow them from sofa and you can earn some interest on them through, uh, their, uh, what's it called? Custody wallet, custody program, unless there's a sofa cryptocurrency that we're missing out on.

Oh boy. Is there, you never know, by the way, guys, if you're curious to learn more about sofa, uh, check out Benzinga is so Phi review that Ryan and I worked on, uh, you heard of rule number 35. No, I haven't. What's that? It's a, if it exists, there's a cryptocurrency of it.

That was a good one. Uh, there is social finance, but this is definitely not 6,000. Yeah. With the real. So Phi, so C, Z Quilla. I can't say some of these Soliqua maybe. Well, I'd had, I don't know. I was trying to guess. Yeah, this is a old school one, but not well, quote unquote old school, but it's, um, super decentralized, um, anonymous and a lot like a Murano mundane.

Minero Minero they're all over the place. Yo producer, go on. Can we get a super cut of that? Yeah. And then I say it wrong, then I get embarrassed. And then I just say it wrong again, and just, it's like a snowball effect. Good content right there. Uh, can you need to do some vocal compilation episode? Yeah, that's what I'm saying.

Tik TOK. Super cut of all the, the goofs. Uh, okay, so let's see. What is the use of this like Monero? You. Old coin. I mean, we can go into it. It's says a de-centralized blockchain by the token and they, they kind of a rebel in the anonymous transactions. I gotcha. Um, okay. It is three o'clock. Unfortunately guys, we are out of time.

Uh, but thank you guys all so much for tuning in today. If you're new to Benzinga or new to moon are bust, make sure you subscribe to the channel and drop a like on the video. So YouTube will show it to more people. We can grow our community. Also, if you're here for crypto, do not forget to subscribe to the Benzinga crypto separate YouTube channel.

It's the first link in the description below. We are going to move over to that channel and really push growth on that. Once we hit a thousand subs. Uh, so make sure you're early. If you want to be entered. That giveaway. Um, but yeah. Thank you guys all so much for tuning in. As I already said, I'm going to take this off.

Uh, and you guys have any closing thoughts for us, Ryan or Brian? Follow me on Twitter for mute and Monday. Yeah. I'm going to work on my vocal lesson. I don't know. I'm not a professional shout out to all the apes out there in the chat. It is up on Twitter, connect with us. We'd love to talk to you. Uh, but until then, uh, we will see you on Wednesday.

Right now. We have pre-market prep at the close coming up. Uh, so if you want that stunk alpha, make sure to stick around. All right. Peace guys.

Why the heck did we have 10 people watching when we started? Yeah, there was no redirect. Uh, it was a coal, you can blame. It's all equals fault. Support this podcast at — https://redcircle.com/moon-or-bust/donations)Advertising Inquiries: https://redcircle.com/brands)Privacy & Opt-Out: https://redcircle.com/privacy)