Over 400 clients later, cryptocurrency expert, Abhinav R. Soomaney continues to help investors master the in’s and out’s of the industry. He has spoken on multiple platforms including podcasts and global summit panels. Soomaney also recently released the Amazon best-selling book, Cryptocurrency in a Nutshell.
Soomaney’s book delves into cryptocurrency and its varied tax implications by highlighting multiple topics.
It outlines “factors affecting cryptocurrency prices, tokens versus coins, types of crypto wallets and how investors can keep their coins safe; comparison between the stock market and crypto market; importance of the white paper; the types of forks and what happens in each case; details about p2p (peer-to-peer) trading; cryptocurrency tax audits and how investors or traders can make investing tax efficient; staking rewards versus bank interest rates, taxation on staking rewards (and) DeFi (Decentralized Finance) crypto tax guide,” wrote Soomaney.
Millions of investors have come to the cryptocurrency industry due to its blockchain-assisted decentralized alternatives to traditional banking. Cryptocurrency users conduct transactions that are public, nonreversible, timestamped and more immediate than traditional processes.
Acknowledging Bitcoin inventor Satoshi Nakamoto as foundational to cryptocurrency’s success, Soomaney’s book helps readers understand the parameters of blockchain technology.
As tax season nears, cryptocurrency investors may need support with strategically saving money. The FTX Crypto Exchange also recently made news due to found fraudulent activity in the marketplace. Investors considering selling their crypto can experience impacts on their taxes.
Regarding the FTX collapse, Soomaney said, “Do not store all tokens in one wallet. Split between multiple exchanges and wallets to avoid complete loss specially when exchanges like FTX/Celsius crash or liquidate.”
Tax-Saving Strategies for Cryptocurrency Investors
Soomaney recommends that cryptocurrency investors consider multiple money-saving strategies:
According to Soomaney, HIFO (Highest-In-First-Out) can minimize capital gains but can increase tax obligations in shifting long-term to short-term.
“Minimize capital gains by using the Highest-In-First-Out (HIFO) tax calculation method that allows you to use the highest cost basis pool against the first sale till that inventory pool is completely exhausted. Maintaining accurate records for tokens transferred from one platform to another will help to determine whether the capital gain is Short-Term Capital Gain or Long-Term Capital Gain and accurately report taxes,” said Soomaney.
Soomaney also advises maintaining accurate records of tokens that are transferred across platforms. This will help determine short-term versus long-term capital gains in addition to ensuring accurate tax reporting.
Taxes vary depending on which attribute of cryptocurrency is being used. DeFi (Decentralized Finance), NFTs (Non-Fungible Token), mining and staking all yield different money-saving tips.
Soomaney additionally serves as the Managing Partner at CryptoTax International and the Senior Associate at Neumeister & Associates, LLP. According to Soomaney, CryptoTax aims to be a global platform and a “one-stop solution for cryptocurrency taxes.”
Investors can learn more by visiting: https://www.cryptotax.co.in/cryptocurrency-in-a-nutshell and https://www.neumeistercpa.com/cryptocurrency-in-a-nutshell/