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ICOs (Initial Coin Offerings) have skyrocketed in the past few years. A lot of attention has been given to regulatory matters than the potential tax issues that may soon arise for both investors as well as issuers. The IRS (Internal Revenue Service) didn’t issue any guidance related to the tax treatment of token issuances. Taxpayers are mostly left to apply existing-tax-rules, depending on regulations and models that offer flawed analogies to token issuances.

cryptocurrency and taxes

Cryptocurrency and Taxes

Overall, the facts of a certain token issuance, which includes the rights related to tokens must be scrutinized to regulate the proper characterization of the tokens for tax-related matters. A token has to be considered as an equity interest in the issuing entity, however, the tax consequences to the holders and issuers will rely on the buckets that token falls into.

The rules can be way too much complex if the equity interest is in a partnership, and if the taxable income partnership will surge over to the investors, so they may have a constant tax liability. Furthermore, if an investor uses “appreciated cryptocurrency” to get the tokens, it will end up in current-tax to the investor on the appreciated cryptocurrency, however, considering other facts, the investor may have the ability to claim that the cryptocurrency exchange for tokens was “tax-deferred.”

There are few token issuers that issue some of their tokens for free through an “airdrop.” Receivers usually sign up for airdropped-tokens through the website of the issuer, and sometimes they have to use social media platforms to disseminate information about tokens in order to receive them. For the receiver, the value of tokens that he/she receives in an airdrop is a taxable income.

Token issuers usually pre-sell some tokens via SAFT or SAFE-T. The holder, under a SAFT usually pays a fixed-amount for getting the right to collect a determinable number of tokens. SAFT often provide that the envisioned SAFT’s tax treatment is as a “forward contract.” If this treatment is appreciated, then the tax on the purchase amount must be delayed ’til the tokens get delivered to the SAFT holder.

Though, SAFT as a forward contract won’t necessarily be appreciated by the Internal Revenue Service, as the agency may pursue to re-characterize SAFT to extricate it from a traditional prepaid “forward contract.”

Based on SAFE (Simple Agreement for Future Equity), SAFE-T is planned to be considered as an equity instead of alterable debt. SAFE-T’s tax treatment is ambiguous; however, it comprises the elements of both SAFE and SAFT.

It’s quite clear from that there’s only a little guidance from the IRS about how token offering is treated for tax purposes. Determining how to describe these tools for tax-purposes is an exhaustive procedure. Issuers must look up for a tax adviser to get some help in organizing their token offerings.

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Xcoins Review

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Today we’ll be reviewing Xcoins, which is a new peer-to-peer lending platform that was launched recently.

Xcoins Review

Buying bitcoins is risky business for everyone, especially due to the possibility of a chargeback. However, Xcoin claims to have found a way around this, since they loan you bitcoins instead of selling them to you. Here’s how it works:

Visit the site and select to “loan” some bitcoins. You’ll be asked to verify your ID and requested to deposit the USD equivalent of how much you’d like to borrow + credit card/ PayPal processing fees + a fixed amount that will be acting as the interest rate on the loan.

Fortunately, there is no ongoing interest on the loan since it is just a one-time payment. Usually, these fees go up to more than 20%.

Selling (or lending) Bitcoins on Xcoins

Xcoins even gives the option to lend bitcoins. You can decide how much you wish to loan in USD and deposit that amount in your Xcoins account. The system automatically matches you with suitable buyers and they will deposit money directly to your PayPal account.

Xcoins Review

In this scenario, you are lending .5 BTC. You would make 15% profit and Xcoins would make 10% profit.

Xcoins put the risk of the transaction on the lender that wants to make money from the premium. There is currently a 15% premium on the bitcoin lending as seen above. So as long as you get a fraudulent customer for less than 15% of the time, you’d end up with a profit.

Xcoins claims that they thoroughly screen all the people that want to buy bitcoins, to reduce the amount of fraud. Also, new users can only withdraw a limited amount of bitcoin and the limit only increases after the user develops a good reputation over time.

What are the benefits?

The main benefit for any seller is obviously to earn around 15% interest when selling bitcoin on the platform.

For the buyer, the advantage is that you don’t need to wire money to an exchange. You can get bitcoin instantly through PayPal or credit card by just paying a slightly higher premium.

What are the risks?

Once you turn over your bitcoins to the buyer, they can choose to challenge the PayPal transaction and unfortunate to the seller, PayPal almost always sides with the buyer. So, the buyer would end up with both the money and bitcoins and you’d be left with nothing else than remorse. This is why you get paid a premium.

 

Conclusion – Will I be using Xcoins?

Being a buyer: Xcoins still seems a little unstable to be used for large purchases since it is very new. Although, if the only way you can acquire bitcoins is through PayPal and you’re willing to pay the price, this might be a substitute to VirWox.

Being a seller: No one would want to risk being flagged by PayPal, thus I wouldn’t recommend this to others as well. However, if you want to try it out, go ahead and please share your experience with us right here in the comments section. We’d love to hear all about it!

In case you’re looking for other platforms where you can purchase Bitcoins, be sure to check out Wirex, VirWox, LocalBitcoins, Cryptonit and Paxful.

 

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Simple method to transfer Bitcoin to PayPal – Payticoins

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Peer to peer

Being the most popular decentralized cryptocurrency, bitcoin is an online version of cash. This independent, peer to peer version of money is not directly connected to ready money. You can not buy it at ease. You will have to use different online exchange sites to transfer or convert your cryptocurrency to fiat currency.

Pay pal has been the biggest ally for bitcoin for quite some time. It allows you to easily and quickly convert your bitcoin amount to fiat currency- USD or any local currency you wish for.

But not all of these sites are safe and convenient to work at. These cryptocurrencies- bitcoin is decentralized. Means, they can not be traced. The biggest con of this feature is that it can create a lot of fraud and scam during the transfer. The risk is pretty much very high. Buyers can complain that they didn’t receive the bitcoin in the transaction. And the seller will not be able to prove his verdict that the transaction was performed. In result, he will have to refund or reperform the already done transaction. The transaction fee of these is comparatively higher too.

How do I send my bitcoins to pay pal?

Payticoins.com provides a secure, easy and free transaction of these cryptocurrencies. Bitcoin being abstract, they believe in reducing the gap between these currencies and the users- you!

They want to revolutionize the way in these crypto coin exchanges are being done around in lots of companies. So, in order to provide secure yet anonymous transactions, PaytiCoins.com aims to aid this revolution of crypto coins in the world today.

Why PaytiCoins Exchange?

Though there are a number of platforms supporting the transaction today. The choices and compromises lay side by side for you to choose from. But why choose Payticoins? So, here are some of the whys:

  • A large number of companies and operators is maintained, for you to choose for the exchange.
  • With exchange time as low as 1 minute to 5 minutes.
  • Making sure there are low commission rates, varies depending on the company you perform the exchange with.
  • 10% referral value to the clients in their referral link through our referral system.

Paypal to Bitcoin- Step by Step

For the transaction, there are few easy and remarkably effortless steps you will need to follow.

  • Open the page to PaytiCoins.com from your browser.

It will not require you to make any account requiring any of your personal information. Supporting the protocol behind the digital currencies, we give you the opportunity to carry out exchange by just providing your valid email address. That email will be confirmed for the validity first and a unique wallet will be created in your desired currency. Later, after the transaction, a confirmation on your provided email will be sent.

You will directly jump to the page where it will require you to add the cryptocurrency type and amount.

  • Send from, choose – cryptocurrency (Bitcoin)
  • Transfer to – Pay Pal

It will then require you to set the amount you need to convert.

  • Enter the number of Bitcoins you need to convert in the fiat currency
  • Then hit- Continue Exchange

This will then show you the Receive Amount in the relevant currency you choose to get transferred to.

The two most important and vital things we will require from you will be your PayPal account address and your email address. These addresses will be verified before the transactions will be performed. And later after the transaction, a verification email will be sent to the address too.

  • Pay Pal Account
  • Email address
  • Hit- Become Exchange

The system will then generate you a secured QR code. It will show you the processing and the number of BTC that are being transferred. This will also display the bitcoin address of the user.

It will require you not to shut down the window until the status prevails as ‘Awaiting Payment’ and is not identified. It will require a couple of minutes until you receive the stated amount in your transfer.

You can always counter check the transaction by scrutinizing your Bitcoin account and verifying email sent to your address of the transaction. The bitcoins sent will be shown in the ‘minus’ with the same amount you chose.

Now you can simply enjoy your transacted amount in your Pay Pal Account with no reservations.

 

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Get Your Online Bitcoin Wallets Adderss Through Btcwonder.com

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Bitcoin wallets or digital wallets are the wallets that require a web browser in order to run, just like websites out there. It’s safe to say that they are pretty much similar to a website.

Surprisingly, the web wallet options are thin compared to the iPhone or Android options.

Right now, there are two Bitcoin wallets worth using. The most reliable online bitcoin wallet is Green Address.

GreenAddress:

To get a Bitcoin wallet that provided protection against cyber-attacks, GreenAddress is the way to go. GreenAddress takes cyber-attacks seriously and provides your coin’s protection against these attacks.

GreenAddress is a “multi-signature” Bitcoin online wallet. This implies GreenAddress shares control of your Bitcoin with you. While other online wallets are prone to cyber-attacks, GreenAddress gives genuine two-factor validation keeping your coins protected in your wallet.

Spectro Coin:

SpectroCoin is London-based bitcoin wallet, exchange, debit card and merchant solution provider. It serves customers in more than 150+ nations. Right now, it encourages more than 20 types of deposits and withdrawals including bank exchanges, credit/debit cards, and cash deposits to name a few. It also gives bitcoin wallet addresses to iOS, Android, and Windows Phone users.

These two are the safest online bitcoin wallets. Although these wallets provide all sorts of security, the ultimate protection comes down to the wallet owner. The best wallet security is the protection of its private key. As long as the key is unshared, chances of your coins getting stolen are very slim.

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