Tax Cuts and Jobs Act: How it Killed Cryptocurrency

           Tax obligation is based on a simple principle, that the Government has the right to a percentage of all profits from financial transactions made in this country. Although it is a fact that all understand, many do not fully agree. They therefore devote much time and energy to avoid paying their share. There have been a variety of methods used to accomplish this goal, but one that had recently gained mainstream attention was Cryptocurrency.

          Whether it is called Bitcoin, Litercoin, or something else, they all had the same attraction. These forms of currency operate independent of any central bank. This means, in theory, that there could be no restriction of personal wealth and it would not be under the authority of any government because it is digital. These currencies and exchanges have been around for a few years, but have gained some prominence because more people have started to use them. With more people putting in their money into an unregulated market, values began to soar and governments did not touch profits being made. Then it all started to change.

          In the days after the Tax Cut and Jobs Act being passed, some began to notice a key change that had been made to an exemption being used to keep Cryptocurrencies from being taxed. This loophole is now closed. As a result, the value is in a freefall. Now governments around the world are either taking steps to similarly tax it, or ban its use altogether. Most people could not explain what digital currency was or how it could be used, but they knew they wanted it to make money. The IRS is now going to tax it just like any other investment. This will be easier said than done considering its decentralized nature. Now that a light has been shown on this area of Finance, the mystery is gone. There is a program in place to find these profits. The government will get its share of Cryptocurrency profits, just like everything else.

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