- May 26, 2021
- Posted by: admin
- Category: Blog
Crypto currency taxes in the USA leads to Turkish Citizenship due to the current and potential taxes to be applied to crypto currency in the USA. This situation motivates crypto investors to change USA citizenship. Turkish Citizenship Because of Bitcoin Tax Rates in the USA is an attractive option. In this article we will analyze this concept.
Current Taxation System for Cyptocurrencies in the USA
When we look in general, the sale, exchange or use of virtual money in economic transactions in the USA causes tax liability. Profits arising after the sale of crypto money are evaluated as capital gains tax. At this point, when calculating taxes, it is important to keep cryptocurrencies long-term or short-term. If the crypto coins are held in the short term (less than 1 year), the profits made by the taxpayers will be taxed according to the normal income tax.However, if it is held in the long term, it will be considered as a capital gain and an additional tax of 3.8 percent can be collected on the net investment income.
Also, if the taxpayers bought goods and services instead of converting cryptocurrencies into fiat money, in this case, the sale is assumed to be made, and the positive difference again is a capital gain. In case of loss as in stock transactions, up to $ 3000 of these losses (1500 $ for each spouse in married couples) can be deducted from the capital gain. The exceeding amount can be transferred to the next year and deducted from the next year’s earnings. In addition, since crypto coins are considered as property, sales tax (VAT) will also arise from all these transactions (as a result of the purchase of goods and services).
Taxation in the USA for Crypto Currencies
- Selling cryptocurrencies in exchange for fiat money (i.e. dollars, euros, etc.)
- Trading one cryptocurrency for another. It does not have to be sold for fiat money for taxation.
- Using cryptocurrencies to purchase a good or service
- Obtaining cryptocurrency as a result of a fork or mining activity
The following situations are excluded from tax:
- Buying cryptocurrencies with fiat money
- Crypto donation to a tax-exempt organization
- Give cryptocurrency to anyone
- Transfer your cryptocurrencies from one wallet you own to another
In the US, the tax rate depends on how long you hold the coins. If the holding period is 365 days or less, you are subject to short-term capital gains tax. In this case, the tax rate varies between 10-37%. Coins with a longer holding period are subject to long-term capital gains tax. The long-term capital gains tax rate is in the range of 0 to 20%.
Turkish Citizenship Because of Bitcoin Tax Rates in the USA
As explained above, with the increasing popularity of blockchain and cryptocurrency investment, governments started to enforce strickt rules on taxation. At this point Turkish citizenship offers lot’s of advantages for cryptocurrency investors because there is no specific legislation in Turkey governing cryptoassets and business transactions involving cryptoassets. For Turkish citizenship one the options is buying a property.Those who have purchased a minimum 250.000 USD worth of housing, workplace, estate or similar properties, can initiate their application process and applicants can choose new names and surnames.
Advantages of Turkish Citizenship by Investment
After becoming a Turkish citizen, a person can have ID cards, passports and driver licenses under their new names and surnames which provides cryptocurrency investors to gain new identity for investment. Also Turkish citizens who do not stay in Turkey for more than 6 months are treated as non- residents and therefore, non-residents are only liable to pay tax on their income derived from the sources in Turkey (limited liability) . In this way Turkish citizenship provides advantages in terms of tax payment as well.