Economic Stimulus and Cryptocurrency with Andrew Gordon
Andrew Gordon is a cryptocurrency tax lawyer and the managing attorney of Gordon Law Group. Andrew concentrates on tax controversy and compliance, crypto, and business law – which makes him uniquely suited to discuss how cryptocurrency users may be affected by the economic stimulus options made available in response to COVID-19.
Andrew joins our show to discuss these economic relief measures, and how cryptocurrency traders and businesses can benefit from them. We also discuss what role cryptocurrency has played in this relief response. In addition, Andrew updates us on any changes to FBAR and FATCA filing since his last time on the show.
Guest
Andrew Gordon
Twitter: @Accounting
Facebook: @GordonLawLTD
Website: Gordon Law
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Episode Highlights & Discussion
FBAR and FATCA Filings: A Reminder (01:35)
Andrew: The FBAR and FATCA are different forms, but both of them are concerned with disclosing the maximum value that you had in the account at any time during the year. They’re not asking for gains or losses – it’s just a disclosure, meaning that there’s no tax calculation. The IRS simply wants to know what is the maximum amount that you had in that account. As long as you disclose and disclose timely, there aren’t any penalties, there isn’t any tax.
Economic Stimulus Programs (05:58)
Andrew: There’s been a lot of different stimulus programs that are available for small businesses, sole proprietors, and so a lot of different people in crypto and even those with businesses outside crypto have been reaching out to us asking: are there different programs that we can take advantage of? How do we take advantage of this? What makes sense for us?
The payroll protection program loans, PPP, is one of the best options out there for small businesses. It really is almost like getting free money or a grant from the government and it allows up to eight weeks of payroll, rent, and utilities to be paid to you in a forgivable loan. So it’s originally a loan, but as long as you use it for those purposes, you don’t just stick the money in your pocket, it is forgiven by the government.
There was originally $349 billion that was approved for this program and within days the money was gone. The SBA ran out of money and news reports suggest that probably about 5 to 10% of the people that wanted funds got it in that initial amount. Unfortunately there seems to be suggestions, as you said, that people that have connections or perhaps even larger companies are getting these loans, but there are things that small businesses, that people listening to this can do and should do, to take advantage of these loans.
Stimulus Options for Crypto Traders (09:37)
Andrew: Some of these other programs do apply to crypto traders. Some of the people out there listening are crypto traders, which is different than [being an] investor.
If you are trading daily, regularly, and it’s really a business, you may be filing your tax return as a trader – which a lot of people may think of themselves as a trader, but in the eyes of the IRS, they’re really investors. This is different because as a trader, you’re essentially a small business and so you’ll be eligible for these same forgivable loans or other loans that any other small business would be eligible for – and you don’t need payroll. That was a big misconception with the payroll protection program loans, [because] it’s got “payroll” in the name.
For people listening out there either as a crypto business, or you just have another business – you’re a schedule C filer on your tax return, and that could be for crypto, or it could be for something else. You can be eligible for a forgivable loan under the payroll protection program. And I’ll fast forward the math for you. If you’re a schedule C business, you can be eligible for a little over $20,000 of forgivable loans. And again, this can be if you’re a crypto trader, it could be if you have a business that’s related to crypto, providing crypto consulting or anything like that, or even something that’s not related to crypto at all.
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