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Practical Guide to Crypto in 2018

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Practical Guide to Crypto in 2018 Practical Guide to Crypto In 2018 HELPING THE EARLY ADOPTERS - INTRODUCING NECESSARY CRYPTO CONCEPTS - TAX, AML/CTF & REGULATORY COMPLIANCE (AUSTRALIA) - PERSONAL FINANCE STRUCTURING (AUSTRALIA) - INVESTMENT STRATEGIES, TRADING & RECORD KEEPING - ACQUIRING & STORING CRYPTO SECURELY 2 Many references in this book refer to Australian related matters. Please adapt this information as you see fit for your local laws. I hope you gain value from this document and much of the content is globally relevant. Disclaimer: It is of note, that the Authors of this material is not a registered Tax Advisor or Financial Advisor, and does not claim to be a Tax Advisor, or a Financial Advisor. None of this document or its contents should be misconstrued as legitimate Tax Advice or Financial Advice. You should seek Tax Advice or Financial Advice before acting on any endeavours related to this information or cryptographically based assets in general. The views and expressions in this document are strictly for fictional reference only. The Author takes no responsibility to you (the readers’) actions, based on what is contained within. By reading further, you agree and are bound by this disclaimer. There are opinions in this document that should be taken as fiction only. Hence this document should be considered for all legal purposes as fiction. Although I sincerely hope it helps to inform early adopters. Because, we rise by lifting others. PRACTICAL GUIDE TO CRYPTO IN 2018 JAMES F & JACK H 3 CONTENTS The Future Of Crypto ............................................................................................................................................................. 9 Distributed Ledger Technology ....................................................................................................................................... 9 How Distributed Ledger Technology will change our lives ........................................................................................ 9 A new economy is forming… ........................................................................................................................................ 10 What to know before you invest................................................................................................................................... 11 What Is Crypto? .................................................................................................................................................................... 12 The current dominant blockchains .............................................................................................................................. 12 How does it work in practice?....................................................................................................................................... 12 Crypto Regulation Is Coming ............................................................................................................................................ 14 It is time to prepare your holdings and get your house in order ............................................................................ 14 For those of you that believe that taxation will not affect you .............................................................................. 14 Tax And Crypto .................................................................................................................................................................... 16 Is crypto an asset or a currency? ................................................................................................................................. 16 Different ways of investing in crypto require different approaches ...................................................................... 17 Capital Gains Tax............................................................................................................................................................. 18 How is CGT calculated? ................................................................................................................................................. 18 How to tax blockchain fork inheritances, airdrops and other crypto income .................................................... 19 Preventing the annual crypto harvest ......................................................................................................................... 20 Tax evasion penalties ...................................................................................................................................................... 21 Tax summary ..................................................................................................................................................................... 25 Personal Finance Structuring ............................................................................................................................................. 26 Hobbyist/Enthusiast ......................................................................................................................................................... 26 Are you an investor, a trader, or hybrid? .................................................................................................................... 26 Investing as an Individual ............................................................................................................................................... 27 Carrying on a “business” in crypto ............................................................................................................................... 27 Trading to turn a profit .................................................................................................................................................... 27 Hybrid trader/investor ..................................................................................................................................................... 28 Keeping Records Of Crypto Endeavours ........................................................................................................................ 29 The First-In-First-Out (FIFO) method for calculating Capital Gains Tax .................................................................. 29 Accounting software quirks ........................................................................................................................................... 30 Keeping separate bank accounts for separate activities ...................................................................................... 30 Anti-Money Laundering/Counter-Terrorism Financing And Crypto ........................................................................... 32 Overview of the latest AML/CTF regulation ................................................................................................................ 32 Regulation of digital currency exchange providers ................................................................................................. 32 PRACTICAL GUIDE TO CRYPTO IN 2018 JAMES F & JACK H 4 Expansion of powers of AUSTRAC ................................................................................................................................. 33 Presumed innocent until proven guilty?...................................................................................................................... 33 Strict liability offences...................................................................................................................................................... 34 Other noted concerns of the bill as it stands in draft form ...................................................................................... 34 Do You Actually OWN Your Crypto And Can It Be Taken Away? ............................................................................. 36 Establishing proof of ownership .................................................................................................................................... 36 Legitimising your crypto holdings ................................................................................................................................. 37 If starting fresh… ............................................................................................................................................................... 37 If you have already been in the crypto game a while ............................................................................................ 37 For those with a modest amount of crypto ................................................................................................................ 37 The <$10,000 exception for personal goods and services ...................................................................................... 38 Where can I spend my crypto? .................................................................................................................................... 38 Paying your Bills with your crypto .............................................................................................................................. 38 Buying precious metals with crypto ......................................................................................................................... 38 Do I have to legitimise my crypto holdings? .............................................................................................................. 39 Thinking about getting creative? ................................................................................................................................
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