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Taxes, and talking about crypto. The Hustle Wed, Mar 21 Brought to you by Launchpeer… flint for your startup tinder. The taxman is coming for crypto investors, and coiners are freaking out To say the crypto market is volatile would...
Brought to you by Launchpeer… flint for your startup tinder.
The taxman is coming for crypto investors, and coinersare freaking out
To say the crypto market is volatile would be an understatement -- Bitcoin’s price went from $997 at the beginning of 2017 to over $19k in December, only to plummet to around $8k on Monday.
Some were smart to cash out at its peak, but, as it turns out, the taxman doesn’t reward people for their ability to get out while the gettin’s good, and now investors have been hit with a big ol’ tax bill their depreciated coins can’t cash.
Tears of a Redditor
Under the heading, “I just discovered that I owe the IRS $50k that I don’t have, because I traded in cryptos. Am I f*cked?” Reddit-user Thoway explained they were blindsided with a $50k tax hit after selling $120k worth of bitcoin at its peak to buy different coins.
It’s as if reality and pretend have collided for Thoway, who reportedly makes $47k a year as an office assistant in real life and can’t afford to pay his crypto-dominated tax bill now that the value of his “coins” have dropped to $30k.
Taxes and crypto: 2 things nobody knows anything about
In 2014, the IRS announced they started viewing cryptocurrency as a property -- not a currency -- meaning anything purchased or sold using a digital asset is susceptible to be taxed as a capital gain.
You could be taxed less depending on if your gains were long-term or short-term: Short-term transactions (holding onto digital assets less than one year) can be taxed as high as 39.6%, though holding out longer than a year and a day could mean a lower rate.
“But I never got a 1099??” -- Right, turns out crypto brokers don’t have to issue 1099s; unfortunately that doesn’t mean the investor isn’t responsible for reporting their gains.
“Mercy me, Mr. Taxman, I know not what I gained”
Still not sure? Put simply (by ripping off the Michael Jordan of comedy himself, Jeff Foxworthy): you might owe taxes on crypto if…
You sold crypto for cash
You bought anything using crypto
You traded crypto for other crypto
You were compensated in crypto
Sorry coiners, demz da rules. Godspeed come April.
The house always wins
Claire’s gets pierced by private equity -- files for Chapter 11
After more than 10 years of struggling to stay in business, Claire’s, the finest purveyor of 50-stud earring packs, filed for Chapter 11 bankruptcy.
But don’t go rushing to stock up on mood rings just yet -- they’re not planning on going out of business.
Instead, they hope to use the bankruptcy filing to rebound and reduce their $2.1B debt 90% by pivoting to online retail and using their brick and mortar locations solely as ear piercing parlors, which they believe will bring customers in-store.
Claire’s rode the private equity train to the brink of bankruptcy
Back in 2007, the private equity firm Apollo Management took the piercing palace private via a $3.1B leveraged buyout (a deal in which the acquirer finances a buyout with borrowed money and uses the purchased company’s assets as collateral).
Because of high interest rates and the chain’s lukewarm cash flows, Claire’s hasn’t been able to take off the gaudy debt choker that was fastened around their neck over 10 years ago.
They’re not the first company to fall prey to this tactic
Toys R Us suffered the same fate after a leveraged buyout in 2005 that cost them $183M in advisory fees to its private owners.
Last year, over 50 US retailers filed for bankruptcy after rolling over their debt from their leveraged buyouts. And the retail merchant of death shows no signs of slowing: Analysts predict another $6B in retail debt will mature this year alone.
Google launches a $300m initiative to help news publishers get it right
Hot off the digital presses: Google announced they are launching the Google News Initiative (GNI) in an effort to assist journalism in the age of fake news.
Over the next three years, the tech giant will put more than $300m toward building products that help create sustainable business models for news outlets while hoping to elevate quality journalism.
The truth: a hot market trend
As of late, Google, Facebook, and Twitter have endured intense (and just) scrutiny by allowing the spread of false and sometimes malevolent information that may have even influenced political elections.
Last week, Facebook was caught in a furious kerfuffle following a whistleblower’s account of the social media giant allegedly selling 50m+ users’ data to an analytics firm working for the Trump campaign at the time of the election; on Monday, the scandal caused shares of the entire tech sector to plummet on Wall Street.
In other words, Google’s timing on this announcement couldn’t have been better.
The Sims’ creator is making a game “of self-discovery" based on your real memories
Game designer Will Wright, creator of The Sims, has come out of years of hibernation to announce his latest project: an ambitious game called Proxi, in which players can “build games based on their memories.”
The idea is for your experiences, called “mems,” to be displayed in playable scenes, and clumped in themed areas for things like “childhood,” “holidays,” and other real world tie-ins.
What’s this all gonna look like?
Nobody knows -- not even Wright. Instead, he’s kicking off a contest to develop the art for the game, with the promise of hiring the winner full time as Proxi’s 3D artist.
You know what they say, if you can’t do, crowdsource.
But, we’ve been burned before…
Some of us remember Wright’s last ambitious game from ’08, Spore, which he touted as the “ultimate game,” in which players could evolve their character from a single-cell organism into an intelligent species capable of space travel.
Some of us may have even pre-ordered it, and waited patiently for it to change their lives forever.
Bumble sent an email to their users this morning that makes it pretty clear where they stand on Match’s acquisition-by-lawsuit strategy:
“We’ll never be yours. No matter the price tag, we’ll never compromise our values… We swipe left on your assumption that a baseless lawsuit would intimidate us.”
*Pause for fist-pumping and “whoop whoop-ing”*
There was speculation that Bumble rejected Match’s previous acquisition attempt due to their rocky history with the company, and this is definitive proof that Bumble hasn’t forgiven or forgotten -- and they’re not rolling over any time soon.