Cryptocurrency Payments Not Reportable to the United States IRS

Bitcoin and other cryptocurrency have attained cult status in recent times, with most leading firms and corporations incorporating it in their business in one way or another. While it is interesting to note that Bitcoin has seen mainstream adoption, the concern regarding its volatility and regulation have always surfaced amid the hype.

One such concern is whether the Cryptocurrency purchase is taxable and reportable to tax authorities with the local governments. Though a lot of nations are still figuring out the proper regulations and tax implications of crypto payments, at least in the United States IRS has clarified the tax reporting for cryptocurrency to some extent. As per an article published in Forbes, the crypto purchases made in USD are not reportable to the IRS.

As per the FAQs updated yesterday on the IRS website, the users need not report the purchases in crypto to IRS.  Before the IRS guidelines were updated, the crypto users were not sure of the taxability of cryptocurrencies bought in USD. They did not know if they had to select the YES option when paying the taxes.

In the 2020 Form, 1040 for the tax reporting, the form asks the users to answer if they received, exchanged, or sent or gained any benefit from the virtual currency. Taxpayers were not aware whether they should answer Yes or No for this if they purchased any digital asset with real currency, meaning USD. IRS updated the FAQ section detailing that taxpayers need not respond “Yes” to this question if they had procured virtual currencies in USD.

One must note that only the cryptocurrency purchased in USD is not reportable to the IRS. If the users have procured cryptocurrency through any other token or coin, then they must answer Yes to the underlying question. In recent times cryptocurrencies have seen widespread acceptance due to which a higher number of users are procuring, selling, and trading in virtual assets.

This also provides more privacy to cryptocurrency traders and users who do not want to disclose their details to the IRS. The updated FAQ helps the taxpayers get better clarity of the treatment of crypto transactions and how it impacts their overall tax reporting.

Robinhood App Review

The Robinhood App Reviewed

It seems as though everything is done electronically these days, with that automated way of life acting as a catalyst behind the burgeoning success of the new and improved way to process investment and trading options and transactions. By now, despite the app store being full of duds, I am certain that you have heard about the diamond that comes in the form of the Robin Hood App. A fully automated, easy to use, and innovative investment app.

So who are they? 

Robin Hood was designed from the ground up for future generations of newcomers, as well as experts in the game of investments and aims to empower those that are utilizing the platform, by delivering simplicity, security, and accuracy of information to their clients. In addition, Robinhood is a 100% free trading and investment space, stating that they believe that the financial system should work for the ‘rest of us’, not just the wealthy.

By eliminating the excess brokerage costs, such as manual account management and numerous amounts of on-site, walk-in locations, the Robin Hood App is able to offer their users/clients zero commission trading opportunities in a quick and simple manner. That, however, is not all that makes the app a massive and overwhelming success.

How Does the Platform Work?

Luckily for us, the Robin Hood Platform is perfect for optimal user interaction and fairly easy to install and get started with. Regardless of if you are using an Apple or Android device, you will be able to head on into the app store and download the FREE app to your device. If you do happen to be in the United States, they also have a new desktop version that is available by following this link.

Upon development, the app goes through a series of questions that allows you to, not only develop a list of likes and dislikes for your viewable market watches, but also acts as part of the KYC process and acts to quickly verify your identity in order for you to be able to actively purchase, trade and sell your stocks. The KYC process is fairly simple and only takes around 24-48 hours to come back, allowing you full access to the overall platform fully. Currently, Robin Hood is also assigning their new users a single share of stock along with sign up. Keep in mind that you will not be able to choose the stock, but it’s free so that shouldn’t be a deal breaker. 

Linking your account

After you’ve completed the identification process, verified your email address and received a verification email, you will be able to access your account’s banking information. Keep in mind that D\due to the sensitivity of the information, you will be required to set up a password in order to full access and unlock the app. They’ve got  pretty nifty setup, with several options for connecting various banking accounts. For those of you who aren’t able to see your banking option, they also allow you to auto input additional information in order to connect an unlisted banking account.

Unfortunately, you will not be able to upload or withdraw funds by using a debit card at this time, however, additional banking features include, direct transfers between the Robin Hood app and your linked bank account, automatic deposits, stock transfers and more.

Your RobinHood Portfolio

Though you’re able to have a nit of design control in the look of your personal profile, the app does a great job of keeping this in order, by selectively placing your ‘favorite’ stocks towards the top, while a graph of potential movement is also available for your viewing purposes.

The interface is actually quite neat and the app updates you with any fluctuation going on within your stock holdings, however, that feature can get a bit out of hand if you’ve got a lot of money within the app, so you may want to update your notification settings at some point.

Cryptocurrency Availability Unlocked

While the original app was meant for general trading opportunities, the development and enhanced value of various cryptocurrencies has dared to break through and disrupt financial transactions across the nation, and now, those utilizing the platform will be able to access and safely trade their chosen cryptocurrencies.  Unfortunately, at this time, this option is only open to 17 states, as they work to attain the proper regulatory documents and complete the necessary processes required for the remaining of the states.

Below, you will find a complete list of tradable cryptocurrencies that are currently supported by Robin Hood, including, as stated above, the buying, selling, and distribution of continuous, real-time market data.

States Available Under this Feature:

Remember, the Robin Hood app is going to be hard at work, getting the regulations needed for the remaining States, however, if you are not in one of the 17 states listed below, don’t fret, just download the app and begin regular stock trades, as they work to deliver you this feature.

Tradable Coins:

At this juncture, the Robin Hood app is only offering buy, sale, and trade options for the below listed five cryptocurrencies.

  • Bitcoin (BTC)
  • Bitcoin Cash (BCH)
  • Dogecoin (DOGE)
  • Ethereum (ETH)
  • Litecoin (LTC)

Cryptocurrencies available for real-time market tracking:

You are able to follow the market in reference to the below mentioned coins, with possible adoption onto the platform in due time.

  • Bitcoin Gold (BTG)
  • Dash (DASH)
  • Ethereum Classic (ETC)
  • Lisk (LSK)
  • Monero (XMR)
  • NEO (NEO)
  • OmiseGO (OMG)
  • Qtum (QTUM)
  • Ripple (XRP)
  • Stellar (XLM)
  • Zcash (ZEC)

The reality of this advancement cannot be overstated, as Robinhood does intend on adding a few more currencies to buy/sell through the app, although they will not be confirming, at this point, which currencies they may be.  This comes on the heels of other similar applications finding success in the land of crypto-trading, while the Robinhood app manages to eliminate a bit of the hardships that users have experienced with similar platforms, including that of Coinbase, which acts as their primary competitor.

Having tested out both platforms myself, I would have to admit that even the initial appeal of Robin Hood is much better aesthetically, which is an automatic push towards one direction, but that isn’t all. Coinbase, while they have been working directly with cryptocurrency since their inception, has an onboarding and approval process that is lacking in ease and speed. Moreover, the comparison of banking options and services available sets Robin Hood ahead of the game.

The biggest two differences between the platforms might actually be the Market Tracking ability that is delivered by Robin Hood as well as the apps in-depth investment options that go far beyond being solely crypto focused. Unfortunately, Coinbase currently only allows for the market viewing of the coins that are currently on their roster, and it is not set up to offer other investment opportunities to their users, at this time.

All in all, I would have to give the Robin Hood App a 4.6/5 and that was hard for me to do, but the fact that you are not able to use a debit card to upload and/or withdraw funds does push their score down. Let’s hope that they will update that feature in the near future!

crypto is coming.

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Interested in other cool crypto posts….check out What happens when the last Bitcoin is mined?and The Price of Bitcoin vs Cost of Mining.

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