A Deeper Look into the Law: Blockchain – Taxation of Cryptocurrencies

Cryptocurrencies such as Bitcoin, Ether, Litecoin etc. are increasingly influencing business models of companies. Bitcoin Miners Hasrate is well equipped with materials that will further develpe your understanding of the Cryptocurrency legal frame work.  These companies also have to deal with taxation. Here you will find an overview of the tax treatment of virtual currencies and tokens. We present the most important points to you.

News: Capital gains on cryptocurrencies are taxable

In a recent judgment of February 14, 2023 (Az: IX R 3/22), the Federal Fiscal Court (BFH) decided that capital gains that a taxpayer could generate within one year from the sale or exchange of virtual currencies (currency tokens, payment tokens) achieved are subject to taxation as a private sale transaction .

In the present case, the taxpayer (plaintiff) had bought, exchanged and resold various cryptocurrencies. In detail, these were transactions with Bitcoins, Ethereum and Monero, which the taxpayer carried out privately. In the year of the dispute, 2017, he made a profit totaling 3.4 million euros. The tax office had subjected the profit from the sale and exchange of cryptocurrencies to income tax.

The BFH has now confirmed this: cryptocurrencies are so-called “other” assets that are subject to taxation as a private sales transaction if they are purchased and sold within one year.

Overview: what is it about?

The market for digital means of payment is growing strongly, albeit with sometimes large fluctuations. Politicians and financial authorities have also taken a look at digital currencies.

Companies that use and work with cryptocurrencies must above all consider possible income tax and sales tax consequences.

The Federal Ministry of Finance (BMF) issued a statement on sales tax in 2018 (letter dated February 27, 2018). According to this – in line with the case law of the European Court of Justice – cryptocurrencies are equated with conventional means of payment for sales tax purposes, insofar as they serve purely as a means of payment.

The income tax classification, on the other hand, has so far been very controversial. In the first supreme court decision of February 14, 2023, the BFH clarified that profits from the sale of cryptocurrencies are taxable under certain conditions. On May 10, 2022, the Federal Ministry of Finance (BMF) published a final letter on the income tax treatment of virtual currencies and tokens. The opinion of the BMF on the income tax treatment of private assets (margin no. 53 et seq.) is now confirmed in this respect by the BFH decision of February 14, 2023.

What are digital or virtual currencies?

  • The financial administration describes digital or virtual currencies as digitally represented units of value of currencies that are not issued or guaranteed by any central bank or public body .
  • The denominations of virtual currencies can be accepted by natural or legal persons as a means of exchange , even without the legal status of a currency.
  • The most well-known virtual currencies include, for example, Bitcoin , Ether, Litecoin and Ripple.

What are tokens?

Tokens are digital units of value that can embody claims or rights. They can serve as payment for services provided in the network or be allocated centrally by a project initiator independently of the provision of computer power. When this happens for the first time, it is called an Initial Coin Offering. Some start-ups use this method to collect capital and thus finance themselves.

Blockchain

Blockchain is an important technology for digitizing the economy and society. It is at the heart of all cryptocurrencies.

  • A blockchain is a multi-participant database with no central control that uses distributed ledger technology .
  • It is designed so that the inventory is tamper-proof and immutable, only allowing additions.
  • In the context of a virtual currency, a blockchain is a decentralized database in which all confirmed transactions are recorded, comparable to a decentralized ledger.

Proof of Work (Mining)

Mining is a process in which computing power is made available for transaction processing (block creation) . Units of virtual currency are allocated to the successful miner who created the block. This process is referred to as mining, based on gold digging.

Wallet

The wallet (translated purse, wallet, purse) is an application for creating, managing and storing private and public keys. In order to carry out a transaction of units of a virtual currency, each user needs a wallet. As a rule, a separate wallet is required for each virtual currency, since the public keys depend on the underlying blockchain.

Initial Coin Offering (ICO)

The term Initial Coin Offering is based on the English term Initial Public Offering (IPO), i.e. IPO. While an IPO involves the sale of shares, an ICO involves issuing tokens in exchange for units of virtual or government currency. As with an IPO, capital is collected with an ICO.

Proof of Stake (Forging)

In contrast to mining, proof of stake is also referred to as forging or minting, i.e. forging or embossing, sometimes also

HOW TO GET RID OF A BIPOLAR SPOUSE?

 

A bipolar spouse’s mental illness can put a burden on marriage, which can lead to divorce. A disease of the brain characterized by extremes in energy, mood, and motivation, bipolar disorder is also known as manic-depressive illness. According to The Bledsoe Firm LLC, If your spouse exhibits the following symptoms, they may suffer from bipolar disease.

  • Negative emotions such as hopelessness, sadness, or crying
  • a general lack of interest in nearly anything
  • Due to a lack of desire to eat, one loses weight.
  • Oversleeping is another name for insomnia.
  • Slowness or agitation in behavior

When one partner has a mental illness, the marriage may be in jeopardy. There are several things to consider while divorcing a person with bipolar disorder.

When divorcing a partner with bipolar disorder, you should keep the following things in mind.

Finding A Separation And Agreement For The Future

A Separation & Settlement Agreement should be obtained before divorcing a partner with bipolar disorder. According to the agreement, you & your spouse must both voluntarily agree to the dissolution of your marriage. Upon the conclusion of the divorce proceedings, this document will serve as a guide for future negotiations.

Unfitness is a common basis for a challenge to the Agreement. Despite the bipolar spouse’s admission, the lawyer has determined that this is the case. Coercion was not involved in the divorce of a bipolar disordered individual.

Take Control Of Your Moods

When separating a bipolar partner, you will feel a range of emotions. Some examples of these feelings are:

  • Anxiety
  • Guilt
  • Loss

Acknowledge these feelings and discover strategies to reduce them if necessary. Join a support group, see a therapist, or journal your feelings in a diary. Don’t let your emotions get the better of you when making this decision.

You can show support for the bipolar spouse by reducing your level of anxiety. To ensure a peaceful divorce process, you may control your decisions and responses.

Take Care Of Yourself

Take quick action to safeguard yourself and your children if you believe your partner is putting them in risk. You can obtain a court injunction or move out of your parent’s house. With the help of an attorney, you can make the greatest decision for your family.

Get In Touch With Your Lawyer

Dealing with a divorce and bipolar disorder can indeed be difficult. In this situation, having an attorney on your side can make the divorce process go more smoothly. Allow your lawyer to step in if you and your spouse cannot communicate. With a proxy in place, the divorce process will go more smoothly and with less anxiety.

  • An attorney can offer help in the following areas:
  • Custody disputes
  • Assets, as well as other estates, are divided.
  • Other issues that may come up during a divorce

When it comes to dividing assets, a divorce lawyer’s goal is to ensure that their clients receive a process that is both fair and just. Investments should be divided following the prenuptial and postnuptial determinations of property each spouse is entitled to. Your lawyer should be appropriate when sharing your possessions according to your will.

Attorney spends time getting to know their clients and learning about the difficulties they are experiencing due to their divorce. Together, the lawyer and the client set goals and strive toward a successful divorce settlement. If you’re looking for legal representation, make sure the chosen person has previous expertise in managing complicated cases.

How To Deal With A Partner Who Has Bipolar Disorder

If you’re divorcing a manic-depressive partner, you’ll want to understand how to deal with the issue for your benefit as well.

Numerous actions must be taken to ensure a peaceful divorce if you have this ailment. With bipolar disorder, what can you do to cope?

  • Take A Breather

A spouse with bipolar disorder can cause you to lose track of who you are, your interests, and your basic needs. Take some time to yourself while you’re going through the divorce process.

  • Become Knowledgeable

Using various web tools, especially after a divorce, might help you deal.

  • Create An Environment Where Your Spouse Can Express Themselves

Be a source of support for your bipolar husband during the divorce process.

FINAL THOUGHTS

If you’re divorcing a bipolar spouse, you’ll want the assistance of an expert divorce lawyer. Ensure you have all the necessary paperwork and evidence to navigate the divorce procedure successfully.

Legal assistance will be provided by the divorce attorneys during the entire process. You will work closely with an expert team to uncover the habits that lead to the divorce. To ensure that you are protected during the divorce process, make contact with them right away.…