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  • Powerful Crypto Wallet

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  • Fast Crypto Trading

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  • Global Payments

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  • POWERFUL CRYPTO WALLET

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  • FAST CRYPTO TRADING

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  • CRYPTO LENDING, TRADING,

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Auto Forward Feature*

Automatically send payments to any crypto wallet you want.

Point Of Sale (POS)

Enhance in-person transactions with crypto payments.

Cryptocurrency Vault*

Safeguard your coins in our vault and lock them for as long as you want.

Global Payments

Grow your business globally with borderless, instant and low-cost crypto transactions.

Auto Coin Conversion*

Avoid volatility by automatically converting coins.

Multi-Coin Wallet

One wallet. 2,210+ coins. Countless features on the go.

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Faqs

Faqs Frequently Asked Questions about Crypto wallets and currency

Find answers to recurring questions and myths about Crypto Wallets and currency

faq
Do I owe crypto taxes?



In the U.S., crypto is considered a digital asset, and the IRS treats it generally like stocks, bonds, and other capital assets. Like these assets, the money you gain from crypto is taxed at different rates, either as capital gains or as income, depending on how you got your crypto and how long you held on to it.

To understand if you owe taxes, it’s important to look at how you used your crypto in 2021. Transactions that result in a tax are called taxable events. Those that don’t are called non-taxable events. Let’s break them down:

Not taxable

    Buying crypto with cash and holding it: Just buying and owning crypto isn’t taxable on its own. The tax is often incurred later on when you sell, and its gains are “realized.”

    Donating crypto to a qualified tax-exempt charity or non-profit: If you give crypto directly to a 501(c)(3) charitable organization, like GiveCrypto.org, you may be able to claim a charitable deduction.

    Receiving a gift: If you’re lucky enough to get crypto as a gift, you’re not likely to incur a tax until you sell or participate in another taxable activity like staking.

    Giving a gift: How thoughtful! You can gift up to $15,000 per recipient per year without paying taxes (and higher amounts to spouses). If your gift exceeds $15,000 per recipient, you’ll need to file a gift tax return (which generally does not result in any current tax liability). If you transfer crypto to someone else outside of a purchase for goods or services, it may count as a gift, even if you didn’t mean it that way.  

    Transferring crypto to yourself: Transferring crypto between wallets or accounts you own isn’t taxable. You can transfer over your original cost basis and date acquired to continue tracking your potential tax impact for when you eventually sell.

Taxable as capital gains

    Selling crypto for cash: Did you sell your crypto for U.S. dollars? You’ll owe taxes if you sell your assets for more than you paid for them. If you sell at a loss, you may be able to deduct that loss on your taxes.

    Converting one crypto to another: When you use bitcoin to buy ether, for example, you technically have to sell your bitcoin before you buy a new asset. Because this is a sale, the IRS considers it taxable. You’ll owe taxes if you sold your bitcoin for more than you paid for it.

    Spending crypto on goods and services: If you use bitcoin to buy a pizza, for example, you’ll likely owe taxes on the transaction. To the IRS, spending crypto isn’t that much different from selling it. You need to sell the asset before it can be exchanged for a good or service, and selling crypto makes it subject to capital gains taxes.

Taxable as income

    Getting paid in crypto: NFL offensive tackle Russell Okung was one of a few big names to take their paychecks in bitcoin in 2021 — and he’s likely paying income tax on it. If you followed Okung’s lead and were paid in crypto by an employer, your crypto will be taxed as compensation according to your income tax bracket.

    Getting crypto in exchange for goods or services:  If you accept crypto in payment for a good or service, you’re responsible for reporting it as income to the IRS.

    Mining crypto: If you mined crypto, you’ll likely owe taxes on your earnings based on the fair market value (often the price) of the mined coins at the time they were received. Crypto mined as a business is taxed as self-employment income.

    Earning staking rewards: Staking rewards are treated like mining proceeds: taxes are based on the fair market value of your rewards on the day you received them.

    Earning other income: You might earn a return by holding certain cryptocurrencies. This is considered taxable income. Although this is sometimes referred to as interest, the IRS treats it differently than interest you'd earn from a bank.

    Getting crypto from a hard fork: Taxes on crypto you got from a hard fork depend on how you use the asset, when it’s available to withdraw from your exchange, and more. See the latest IRS guidance on hard forks

    Getting an airdrop: You might receive airdrops from a crypto company as part of a marketing campaign or giveaway. Getting an airdrop is taxable as income, and you’ll need to report the amount in your taxes. See the latest IRS guidance on airdrops

    Receiving other incentives or rewards: This list isn’t comprehensive — there are a variety of reasons why you might receive free crypto. These can include rewards from Peso Earn or incentives like getting $5 in bitcoin for referring a friend to a crypto exchange. Regardless, you’ll need to report these as income.

Good news for hodlers

If you’re holding crypto, there’s no immediate gain or loss, so the crypto is not taxed. Tax is only incurred when you sell the asset, and you subsequently receive either cash or units of another cryptocurrency: At this point, you have “realized” the gains,  and you have a taxable event.
How much do I owe in crypto taxes?

So it looks like some of your crypto activity is taxable — what now? You can estimate how much you’ll owe in taxes by calculating your income, gains, and losses. Here’s what that means:

Calculating crypto income


If you’re a U.S. taxpayer, you’re probably used to seeing your federal and state income tax deducted from your pay stubs. The crypto you receive as income (like mining, staking, and rewards) is also subject to these same income taxes, which often won't be deducted or withheld. When you report your earnings, you’ll generally owe according to the income tax rate appropriate to your tax bracket. Word of caution: If you’ve earned a lot from crypto activity, it might affect what tax bracket you’re in and you may end up paying a higher tax rate on some of your earnings.

Visit IRS.gov for the latest guidance on federal income taxes.

Calculating capital gains and losses


To calculate the amount you gained or lost, you’ll first need to know how much crypto you started with. This is called your cost basis.

Knowing your cost basis


When you buy cryptocurrency, your cost basis is generally determined by how much you paid for it. However, if you received crypto from mining or staking, your cost basis is determined by the fair market value when you received it. Your cost basis for gifted crypto will depend on both the basis the person who transferred it to you had and the fair market value when you received it.

When you sell your crypto, you can subtract your cost basis from your sale price in order to figure out whether you have a capital gain or capital loss. If your proceeds exceed your cost basis, you have a capital gain. If not, you have a capital loss.

Short-term vs. long-term capital gains


Capital gains taxes are applied at both the federal and state (where applicable) level. They can be long-term or short-term, and how long you’ve held your crypto affects how much tax you’ll end up owing. If you held onto your crypto for more than a year before selling, you'll generally pay a lower rate than if you sold right away.

    Long-term gains are taxed at a reduced capital gains rate. These rates (0%, 15%, or 20% at the federal level) vary based on your income. Higher income taxpayers may also be subject to the 3.8% Net Investment Income Tax on their gains or other income.

    Short-term gains are taxed at your ordinary income rate, which is usually a higher, less-favorable rate.

Remember, taxable events happen when you realize losses or gains, meaning you’ve sold your crypto by either selling for cash, converting to another crypto, or spending it on a good or service. The gains are unrealized if you still own the original shares.

Understanding your capital losses


You’ve realized a capital loss when you sold an asset for less than you paid for it. Losses can work to your advantage, though. You can use losses to offset other capital gains (including from non-crypto assets, like stocks) you may have had during the year on a dollar-for-dollar basis, potentially reducing your overall tax bill.

If you have more losses than gains or have no gains at all, the maximum amount of losses that you can declare each year to offset other income is $3,000. Any remainder carries over to subsequent years until the full amount of the loss is applied.

Peso Gain/Loss Report


This tax season, Peso customers will be able to generate a Gain/Loss Report that details capital gains or losses using a HIFO (highest in, first out) cost basis specification strategy. This report is designed to help taxpayers quickly and easily understand their gains or losses for the tax year, using our calculations. The report will only have information about activity on Peso. It won’t have information about crypto-related transactions outside of Peso. It’s important to review and verify the information for accuracy before you use it to file. The tool should not be used as official tax documentation. For more on Peso Reports and IRS forms, read our article: Tax forms, explained.

Cryptocurrency Questions for Beginners


People who are learning about cryptocurrency for the first time would reasonably have many doubts. Starting from the definition of cryptocurrencies to their working, there are many cryptocurrency questions for beginners which you should know. Here are some of the frequently asked questions related to cryptocurrency for beginners.


1. What is cryptocurrency?


The first and obvious addition among cryptocurrency FAQs would turn the emphasis towards definition of cryptocurrencies. Cryptocurrency is basically a digital form of currency with the support of cryptographic security for conducting trusted transactions. The underlying technology which runs cryptocurrencies is blockchain, and it offers a ledger for documenting all transactions. 

As of now, you can find multiple cryptocurrencies in circulation, such as Bitcoin, Ether, and many new cryptocurrencies. The cryptocurrencies run as decentralized systems or networks without allowing complete control to a specific entity. Another important highlight of cryptocurrencies refers to the method for generating them. For example, miners could use their computing resources and electricity for mining cryptocurrency or stake their assets in a network for earning governance tokens.


2. What is blockchain?


You could not find any list of cryptocurrency questions for beginners without the mention of blockchain. The first-ever cryptocurrency, Bitcoin, is the first successful implementation of blockchain in the real world. Blockchain technology is basically a transparent, publicly accessible, trustless, and secure ledger. 

It helps in secure transfer of the ownership of units of value by leveraging proof of work consensus and public-key encryption methods. Blockchain leverages decentralized consensus for maintaining the network, thereby excluding intermediaries such as government, banks, or corporations from the process. 

On top of it, the expansion of the blockchain network increases the level of decentralization, thereby strengthening security on blockchain. Interestingly, the capabilities of blockchain technology don’t focus on Bitcoin only and also extend to financial services, healthcare, and gaming.


3. What are public and private keys?



The next important addition among best questions about crypto would draw attention towards the basic elements in working of cryptocurrencies. The primary foundation of Bitcoin and other notable cryptocurrencies is public-key cryptography. According to the cryptographic system, two different types of keys, such as public key and private key in pairs, can support crypto transactions. The public keys are important for identification and should be publicly visible. On the other hand, the private keys help in authentication and encryption, thereby implying that they are secret in nature.


4. How do cryptocurrencies work?


The working of cryptocurrencies is also a common highlight in cryptocurrency questions and answers for beginners. Popular cryptocurrencies such as Ethereum and Bitcoin work by using three basic pieces of information. The first important aspect in the working of cryptocurrencies is the address related to a specific account. The second important piece of information is the balance you would use for sending and receiving funds. 

Another significant aspect for the working of cryptocurrencies would refer to the public and private keys associated with a specific address. You can generate a private key by generating a Bitcoin address which would also help in identifying the corresponding public key. Subsequently, you can use the address as a representative of the public key for different transactions. On the other hand, the private key offers control over ownership of the funds in a specific address.


5. What are the reasons for the popularity of cryptocurrencies?


The reasons for popularity of cryptocurrencies also set the foundation for some frequently asked questions about cryptocurrencies. Interestingly, you can find various reasons for the popularity of cryptocurrencies. One of the most common reasons for popularity of cryptocurrencies refers to the assumptions suggesting that cryptocurrencies are the currency of the future. In addition, cryptocurrencies also remove banks and other financial intermediaries from focusing on reducing the value of money. 

Most important of all, the technology behind cryptocurrencies, i.e., blockchain, is the biggest draw for the future of crypto. Blockchain offers a decentralized system for processing and documenting transactions with better security in comparison to conventional payment systems. On top of it, the rising value of cryptocurrencies also encourages people to turn towards cryptocurrencies in large numbers.

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