Uncle Samâs IRS is coming for your crypto gains with warrants. [Unsubscribe]( [Image](https://) Cryptos Gains are Taxable, and Uncle Sam Demands His Cut - The IRS is getting uppity about crypto gains for US citizens and green cardholders.
- You canât hide if your crypto exchange gives you away.
- Voters in metropolitan areas are dumber than the politicians running them. Recommended Link [The Grave Has Already Been Dug]( [Click here for more...]( ouâd have to be blind not to see that the stock market is completely divorced from the economic reality⦠We have record unemployment, the millions of jobs lost in the pandemic arenât coming back, and now Biden and Co. are running up the debt faster than any administration in history⦠And as the stock market continues to hit new highs⦠the REAL economy digs itself deeper and deeper into a recession⦠But you canât fake a recovery⦠Which means that the grave has already been dug⦠And the stock market is just a deadman walking⦠All it would take is a tiny push to send us spiraling over the edge into the abyss. And on [May 10, 2021]( THIS coming Monday⦠it looks like we just might get it. See why we might be on the verge of the biggest stock market sell-off in history and how you could protect yourself. [Click Here To Learn More]( Sean Ring Editor, Rude Awakening Happy Monday! I hope you had a great weekend. I know the Rude is more about macro and gold than anything else, but I think itâs safe to say that cryptos are a big part of the macro picture. As such, this is a significant development, especially if you happen to have been a HODLer and then sold. Both the WSJ and Zero Hedge Warn Against IRS Crackdown on Crypto Iâm someone who scours both the lamestream and alternative media most days. So when [The Wall Street Journal]( and [Zero Hedge]( have the same story featured prominently on their front pages, I pay special attention. Unsurprisingly, the IRS wants their cut. Of what, you ask? Well, the outstanding cryptocurrency and other digital gains you or your younger, hipper friends probably experienced over the last few years. Iâve been crystal clear about how much I hate tax, but capital gains tax is a special kind of stupid. Itâs almost as if the government is saying, âThanks to the looseness of our monetary policy blowing up your assetâs price, we deserve some wedge for our trouble.â Capital gains tax (CGT) is particularly insidious because it discourages investments and disincentivizes entrepreneurs. A little trivia to start off your Monday morning: What year did Japan start to tax interest and capital gains? Thatâs right: 1989. You may ask, âWhy would anyone want to do that?â In this case, I think thereâs a clear incentive. Governments surely want to destroy crypto. After all, allâs fair in love and war. Bitcoin was designed to destroy fiat currencies. Remember this? The [hidden message]( in the genesis block was "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". It was a clarion call to the world to wrest control of the money supply from the worldâs governments. Whether or not Rothschild actually said this - and there are some pretty intense debates about that - whoever controls the money supply indeed controls a country. One has to look no further than the subsector of financial journalism known as âFed watchingâ to confirm this. Of course, The State wants to maintain control over the country and economy. It wants to quietly take from its productive citizens and give to its unproductive citizens flamboyantly, to paraphrase Thomas Sowell. After all, itâs a great way to get votes in a democracy. So it makes sense that the U.S. Government sent its attack dog, the IRS, to confiscate a good portion of the crypto gains. They can make some cash and purposely knockout crypto the same way the Japanese government inadvertently knocked out its own stock market. Some Warnings First: First, itâs important to note I cannot give you personal financial advice. So any ideas you get from my writing must be vetted with your personal financial advisor before you do anything. Clearly, I donât know your unique financial situation, so itâd be remiss of me to give you advice anyway. Second, as much as I hate taxes, we must pay them. Not because itâs the âright thing to do.â Itâs because itâs simply too easy for the U.S. government to get information on you if you try to dodge tax. Incidentally, one of my favorite European sayings is this: Germans pay income tax out of civic duty. Italians donât, and for the same reason. Third, tax avoidance is not tax evasion. Tax avoidance is legal; tax evasion is not. Quite frankly, there are so many legal ways to avoid tax. Itâs just plain lazy to evade tax. Consult an accountant. Minimize your taxes as best you can. Itâs none of your hippie/leftist/Democrat friendsâ business what you do with your money. When you shuffle off your mortal coil, either your children are going to get your wealth, or some strangerâs kids will. Accountants cost a bit upfront but pay for themselves over time. And theyâll help make sure your money is put to its best use. Now, hereâs how tax and crypto relate to each other. Virtual Currencies are Property, Not Currency In 2014, the IRS declared cryptocurrencies are property and are taxed as such. Theyâre not currencies like dollars or euros - and they certainly donât depreciate as much. This declaration is crucial because it puts cryptos directly in the sights of the IRS. Ignorantia juris non excusat. (Ignorance of the law excuses no one.) Very quickly, courtesy of [The Journal]( - If you own your crypto for longer than a year, you get taxed at the long-term capital gains tax rate.
- If you own it for less than a year, you pay the ordinary income tax rate on it.
- Capital losses on crypto investments can offset taxable capital gains on other assets as well as crypto, plus up to $3,000 of ordinary income such as wages a year. Unused losses carry forward to future years.
- If youâre paid in crypto, you need to pay income or self-employment tax on it.
- If the IRS thinks youâve understated your income by 25%, they have 6 years to review it, not the usual 3 years. Even if youâre a US ex-pat who hasnât renounced your citizenship (yet), you may need to declare your crypto on your FBARs if you have more than $10,000 worth (currently about â
of a Bitcoin). The declaration requirement didnât come from the IRS, incidentally, but from the Financial Crimes Enforcement Network, a separate unit of the Treasury. Itâs not law yet, thankfully, but keep a weather eye out for any changes. Why am I telling you all this? Isnât crypto anonymous? No. No, it isnât. The IRS launched two new investigations to catch crypto âtax cheatsâ targeting two different exchanges recently. In April, a judge in Boston approved an IRS summons to the payments company Circle and its affiliates, including the crypto exchange Poloniex. In May, a San Francisco judge approved a similar summons for records from Kraken, another exchange based in California. Both summonses apply to customers who have traded more than $20K in crypto in any single year between 2016 and 2020. In 2016, the IRS received approval for a similar summons for Coinbase - of recent IPO fame - and obtained information for about 13,000 customers. If these exchanges cannot protect your privacy because Joe Biden is coming for your crypto wealth, then thereâs nowhere to hide. I know you can do so much more - and better - with your money. Just like the Italians I mentioned earlier. But this is the state of America right now. If you want to feel better about other governments pissing their taxpayersâ money up a wall, letâs travel to Old Blighty for the latest taxpayer-funded disaster. Recommended Link [Americaâs FINAL Wealth Transfer]( [Click here for more...]( Thanks to a recent drastic decision made behind closed doors in this building on March 23rd, 2020 at 8 A.M⦠â¦Millions of Americans will likely fall into poverty in the coming months⦠In what historians will call the end of Americaâs middle class. Find out the 5-steps to take immediately to protect & grow your wealth. [Click Here To Learn More]( London Voters are Dumber Than Their Mayor No matter how bad America gets, my friend, just look across The Pond and thank God. Thank God for 1776, the 2nd Amendment, and decent weather. But most of all, thank God for putting a 3,500-mile-wide ocean between you and the idiots who just re-elected Sadiq Khan as Mayor of London. (If you still insist on living in a blue state, thatâs entirely your fault. Youâve had plenty of warning.) Under Khan, Londonâs knife crime and acid-throwing Olympics have reached new peaks (or troughs, if you have to suffer through it). According to the [Ben Kinsella Trust]( âonlyâ 11,459 knife offenses were recorded in 2020, down from 14,586 in 2019. That means knife crime only decreased 21% in a lockdown year. Acid attacks have surged in the United Kingdom in recent years, with 15 acid attacks per week between 2015 and 2018. 75% of those occurred in London. Attacks came down for 2019, but I couldnât find any finalized data for 2020. Itâs important to note that Khan was elected for his first term in 2016. But with the lax crime prevention and the draconian lockdown, what does Khan think London needs? A paint job. With no hint of irony, Mayor Khan ushered in his second term with this Facebook post: David Hockney, an 83-year-old British Pop Art painter no one outside of the UK has ever heard of, must have channeled his inner Picasso: âIt took me four years to paint like Raphael, but a lifetime to paint like a child.â - Picasso. Hockneyâs office is in Los Angeles, so the [starving artists living in London were quite hurt]( they werenât asked to fingerpaint for the city. Hockney drew this âmasterpieceâ on his iPad. I know, youâre thinking, âI couldâve done better.â These angry Londoners agree: But I think Luke Benson mustâve tapped into the actual phone call, reminding Hockney his work was due. No contrition. No âIâm sorry I pissed your hard-earned money up a wall.â No âDavid, this sucks an inordinate amount of #*@&. Can you please trash this entire shambles and start over?â Just good old CYA. And why not? He just got re-elected. Ahh, a good time was had by all. And it only cost GBP 7,000,000 or nearly $10,000,000. Rumor has it Mayor DiBlasio is on the phone to Hockney right now. With that, I leave you to your Monday. Have a great week ahead! All the best, Sean Ring
Editor, Rude Awakening Recommended Link [Billionaire Leaves Crowd In Shock]( [Click here for more...]( An audience of a few hundred (including myself) quietly gathered in Washington D.C. a few months back. Thatâs when the worldâs richest man, Elon Musk, took the stage⦠and shocked the entire room. It all has to do with this image you see on your screen⦠showing a surprising new discovery heâs made. Not only will this blow you away⦠it could also transform the American economy forever. [See Elon's Shocking Reveal Here]( [Whitelist Us]( | [Archive]( | [Privacy Policy]( | [Unsubscribe]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [unsubscribe](. Please read our [Privacy Statement.]( If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting us.]( © 2021 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Email Reference ID: 470SJNED01