Latest / The Paul Barron Crypto Show / Tax Refund Day Rally?🚀 Doomspending Incoming🔥Coinledger INTERVIEW
Transcript
- 0:00Speaker 1: Tax Day just around the corner. Could we see a
- 0:02Speaker 1: doom spending rally today we'll break it down with a
- 0:04Speaker 1: tax expert. You guys don't want to miss it, let's
- 0:06Speaker 1: jump in. I do want to thank our sponsor today
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- 0:29Speaker 1: no monthly fees, so a nice package for you guys
- 0:32Speaker 1: as you build your IRA. I wanted to bring in
- 0:35Speaker 1: David from a coin Ledger. We've had him on usually
- 0:38Speaker 1: around this time of year talking about taxes. So David,
- 0:41Speaker 1: how are you?
- 0:42Speaker 2: I am doing well.
- 0:43Speaker 3: We have like a week left of the US tax
- 0:46Speaker 3: season before the fifteenth, so it's a busy time here.
- 0:50Speaker 1: Yeah, no kidding. Listen, We've got a couple of people
- 0:53Speaker 1: pointing at the April fifteenth as a potential bullish indicator.
- 0:57Speaker 1: Matt Hogan was talking about saying, Hey, the fifteenth could
- 1:00Speaker 1: mean that we could see an up trend of people
- 1:03Speaker 1: finally off the hook of having to deal with taxes
- 1:06Speaker 1: after the fifteenth. Do you think we'll see a rally
- 1:08Speaker 1: on on crypto after all this.
- 1:11Speaker 2: I think there's a chance. I think there's a chance.
- 1:14Speaker 3: You know, as people get refunds back, there is more
- 1:18Speaker 3: liquidity in the market, especially amongst retail folks, and so
- 1:21Speaker 3: I think there's a chance that some of that finds
- 1:23Speaker 3: its way into crypto assets.
- 1:25Speaker 1: We saw this last year on gen Z and some
- 1:31Speaker 1: millennials that were doom spending is what do they call it?
- 1:34Speaker 1: And typically it's like you get your tax refund back
- 1:37Speaker 1: and then you go put it against a few things.
- 1:39Speaker 1: A lot of people would maybe go against crypto. I've
- 1:41Speaker 1: got a clip here I want you to watch. Take
- 1:43Speaker 1: a look. We're not going to be financially responsible with
- 1:46Speaker 1: our tax refund if I'm being completely honest.
- 1:49Speaker 2: You know what, I'm gonna get me a little something.
- 1:50Speaker 3: I put eight hundred dollars into my stocks.
- 1:53Speaker 2: Hi, my beauties, let's spend the day together.
- 1:55Speaker 1: First, we're gonna go get breakfast at waffle House.
- 1:57Speaker 2: Let's go do some retail shopping.
- 1:59Speaker 1: I got the brownie batter.
- 2:01Speaker 2: It was okay, but not my face. I'm about to
- 2:04Speaker 2: spend all of my money.
- 2:05Speaker 3: Looks like Christmas came early. They better send it with interest.
- 2:09Speaker 2: They're real quick to charge us interest when we owe
- 2:11Speaker 2: them money. It is okay to see, but do you
- 2:13Speaker 2: know how.
- 2:14Speaker 3: Rare this is to find online?
- 2:16Speaker 2: This is how the Disney company is still raking in cash.
- 2:20Speaker 2: Is unbelievable, all.
- 2:23Speaker 1: Right, So the point is is that people could take
- 2:25Speaker 1: this tax or fund, move it into investments and kind
- 2:30Speaker 1: of get going here. Do you think this is going
- 2:32Speaker 1: to be another doom spending year? Do you think people
- 2:35Speaker 1: are finally going to say, hey, no, I need to
- 2:36Speaker 1: beat inflation and invest.
- 2:40Speaker 3: Yeah. I think some of the money will find its
- 2:42Speaker 3: way into investments and some won't.
- 2:45Speaker 2: The question is how much.
- 2:47Speaker 3: I don't know, but I do think you know a
- 2:50Speaker 3: chunk of that will find its way into assets like crypto.
- 2:54Speaker 1: In your opinion right now, I'm just kind of curious.
- 2:57Speaker 1: Do you think this year was because a lot of
- 2:58Speaker 1: people lost money in crypto? In twenty five some people
- 3:02Speaker 1: took tax lost harvesting in December? Do you think this
- 3:07Speaker 1: was a good or a bad tax here for crypto
- 3:09Speaker 1: in general.
- 3:12Speaker 3: I think overall bad just in terms of folks did
- 3:16Speaker 3: lose money now, not across the board, but you know,
- 3:20Speaker 3: in the period of prices declining year over year, that
- 3:25Speaker 3: does create tax savings opportunities, as you mentioned, because if
- 3:29Speaker 3: you have realized losses, that deducts against gains and income
- 3:33Speaker 3: and you can save money on your total taxable income.
- 3:36Speaker 3: But overall, I think, yeah, not as great of a
- 3:38Speaker 3: year when we look back on twenty twenty five.
- 3:41Speaker 1: Anything that you guys have been getting in terms of
- 3:43Speaker 1: data or trends that you could see, especially for preparing
- 3:49Speaker 1: for twenty twenty six, that you could share with us,
- 3:52Speaker 1: anything that you're watching.
- 3:54Speaker 3: Yeah, The big thing is the big change that all
- 3:56Speaker 3: the exchanges are now sending out Form ten ninety nine
- 4:00Speaker 3: D to all investors.
- 4:02Speaker 2: So if you bought solder trade a crypto on let's.
- 4:04Speaker 3: Say coinbase, now coinbase will send you a tax form
- 4:07Speaker 3: that details those trades and the irs will receive an
- 4:10Speaker 3: identical copy. And so this is really kind of bringing
- 4:14Speaker 3: out folks who maybe are a little bit behind or
- 4:16Speaker 3: haven't historically been reporting any crypto income. And so I
- 4:20Speaker 3: think that's really the story of the year from our
- 4:21Speaker 3: side is we're seeing a lot more folks come out
- 4:23Speaker 3: of the woodwork who you know, are kind of reconciling
- 4:26Speaker 3: these ten ninety nine dy a's for the.
- 4:27Speaker 2: First time that the IRS now has a copy of.
- 4:31Speaker 1: Do you think okay? So for twenty twenty six, is
- 4:33Speaker 1: there anything coming down the pipeline that you know of
- 4:37Speaker 1: other than it's likely that we'll see Congress probably once
- 4:41Speaker 1: clarity is done, and I want to kind of get
- 4:42Speaker 1: your opinion on that, start to move forward on some
- 4:45Speaker 1: sort of tax code for crypto anything that you're concerned
- 4:48Speaker 1: with around crypto taxes for twenty twenty six that might
- 4:52Speaker 1: cycle into next year.
- 4:55Speaker 3: No, I think not concerns, more like hopefully benefits, hopefully
- 4:59Speaker 3: maybe deminimous spending exemptions, more clarifying facts around stable coin
- 5:05Speaker 3: transactions and how that can you wash out and not
- 5:10Speaker 3: have to get reported line by line, So more hopeful things.
- 5:14Speaker 3: I don't think there's going to be any like dooms
- 5:16Speaker 3: like legislation that are going to harm people.
- 5:18Speaker 2: I think hopefully only good.
- 5:22Speaker 1: So good news maybe coming out of that, especially if
- 5:25Speaker 1: we get clarity going through. I think that'll be the
- 5:27Speaker 1: first step which will have other effects that will be
- 5:31Speaker 1: somewhat tertiary to what's happening in the market right now.
- 5:34Speaker 1: I'm looking at the potential here of taking your tax
- 5:38Speaker 1: refund and looking at long term savings, and if you
- 5:41Speaker 1: think about staking eth would be one. I think it's
- 5:44Speaker 1: right now about two and a half. You look at
- 5:46Speaker 1: even what they're doing with some of the vaults, which
- 5:48Speaker 1: have been pretty significant. What do you think about this?
- 5:51Speaker 1: Do you think this would be a good strategy for
- 5:53Speaker 1: someone in terms of how to deal with a tax refund.
- 5:56Speaker 1: Now you've got a little bit of cash back. Is
- 5:58Speaker 1: this an opportunity to maybe take advantage of?
- 6:02Speaker 3: Yeah? I think as interest rates have come down, more
- 6:05Speaker 3: incentive to put liquid assets into these types of vehicles
- 6:12Speaker 3: is kind of the money markets aren't paying out as high,
- 6:15Speaker 3: so if you just have idle cash can be a
- 6:17Speaker 3: good spot to keep some of that cash or you know,
- 6:21Speaker 3: pull it off kind of in an investment. As we've seen,
- 6:24Speaker 3: the money market funds aren't paying what they were a
- 6:27Speaker 3: couple of years ago.
- 6:29Speaker 1: Yeah, I think the advantage here is this would not
- 6:31Speaker 1: be qualified as income when you're on liquid steak tokens,
- 6:35Speaker 1: so because it just rolls in it to the token itself.
- 6:39Speaker 1: Are there other things that you guys are are watching
- 6:42Speaker 1: that maybe starts to build value without creating those those
- 6:46Speaker 1: kinds of events that occur when you start to take
- 6:49Speaker 1: profits on crypto in general.
- 6:52Speaker 2: Yeah, you're totally right.
- 6:53Speaker 3: When it accrues to kind of the token itself in
- 6:56Speaker 3: that mechanism, then when you realize the game by x
- 7:00Speaker 3: the position, it's like a sale event, and that realizes
- 7:02Speaker 3: capital gains.
- 7:03Speaker 2: Most tax professionals would.
- 7:05Speaker 3: Argue, which are taxed typically less than your ordinary income
- 7:10Speaker 3: tax bracket. And so that is a great strategy if
- 7:13Speaker 3: you're wanting staking exposure to go that route rather than
- 7:18Speaker 3: a route where you're getting dripped rewards to a wallet
- 7:21Speaker 3: which that is very certainly income which is going to
- 7:25Speaker 3: be taxed at your ordinary income tax.
- 7:27Speaker 2: Right, so we're.
- 7:28Speaker 1: Seeing bitcoin now hovering around seventy k again, even after
- 7:32Speaker 1: you know, the most recent events, we started to see
- 7:34Speaker 1: a little bit upside. But the point being is that
- 7:38Speaker 1: is this a time maybe in which somebody might start,
- 7:43Speaker 1: you know, because for twenty twenty six, they may not
- 7:45Speaker 1: want to take and sell their bitcoin, but they may
- 7:48Speaker 1: want to garner assets against it. So taking out a loan,
- 7:52Speaker 1: things of that is that still a solid strategy for
- 7:55Speaker 1: a crypto investor is loaning against their asset.
- 7:58Speaker 2: Yeah, totally.
- 7:59Speaker 3: If you are trying to make a large purchase in
- 8:02Speaker 3: your life and you need some cash, but you don't
- 8:04Speaker 3: want to sell your bitcoin and you don't want to
- 8:06Speaker 3: realize maybe you still are in a large gain position.
- 8:10Speaker 3: A lot of folks do find when they run the
- 8:12Speaker 3: numbers that hey, the lending rate that I'm going to
- 8:15Speaker 3: owe on lending against my bitcoin pulling out cash kind
- 8:18Speaker 3: of like a home equity alone, if you think about it,
- 8:20Speaker 3: is less than the tax bill I would incur by
- 8:23Speaker 3: just liquidating it. Now you have to be aware of
- 8:27Speaker 3: if you take out a loan and the price goes down,
- 8:29Speaker 3: you know, you could get margin called and have to
- 8:31Speaker 3: post more collateral. But this has been a strategy that
- 8:36Speaker 3: sophisticated folks have been using for a long time to
- 8:38Speaker 3: not realize the capital gain and still be able to
- 8:43Speaker 3: leverage the asset value of their bitcoin holdings.
- 8:47Speaker 1: Well, I think the difference here for a lot of
- 8:49Speaker 1: people who've maybe done with this with real estate or
- 8:51Speaker 1: gold is the volatility that you know cryptotypically, you know encounters,
- 8:57Speaker 1: So that's the one factor there. But at the point
- 8:59Speaker 1: we are are right now, which is I would say,
- 9:02Speaker 1: either near the bottom or possibly seeing one major leg
- 9:07Speaker 1: down again, It's very possible, depending on what your loan
- 9:10Speaker 1: to value would be, that would probably be a good
- 9:13Speaker 1: time as we as you start to see it, you know,
- 9:15Speaker 1: going down, because then as it accelerates up, it starts
- 9:18Speaker 1: to create a really great benefit for you. Let's talk
- 9:21Speaker 1: about the Clarity Act, so clarity comes through right now.
- 9:26Speaker 1: There's a new White House report out here. They did
- 9:29Speaker 1: a whole thing on whether or not stable coins would
- 9:31Speaker 1: cause problems for banks. They found out that, no, it's
- 9:34Speaker 1: not necessarily the case. I'm kind of curious on your opinion.
- 9:37Speaker 1: You've been watching this for quite some time. Do you
- 9:39Speaker 1: think we could get lucky and actually win on the
- 9:43Speaker 1: on the yield situation in general the industry?
- 9:47Speaker 2: Yeah, I hope.
- 9:47Speaker 3: So. I think coinbase and others have been fighting the
- 9:51Speaker 3: good fights, and I am hopeful that we can, you know,
- 9:57Speaker 3: get those wins and get that passed into law so
- 10:00Speaker 3: that you know, future administrations, whether left or right, that
- 10:03Speaker 3: is much harder to change when it gets signed into law.
- 10:07Speaker 2: Yeah.
- 10:08Speaker 1: Before we go to our lightning round, David, which is
- 10:10Speaker 1: just kind of a quick random questions on where the
- 10:14Speaker 1: industry is as related to taxes. Is there anything that
- 10:17Speaker 1: a person could do now, knowing that tax deadline is
- 10:22Speaker 1: next week? Is there anything they can do now? And
- 10:25Speaker 1: would an extension hurt them or help them even if
- 10:27Speaker 1: they owe tax What would you be your scenario there?
- 10:32Speaker 3: So there's no penalty or harm in filing an extension
- 10:35Speaker 3: now to your point, if you do owe taxes, then
- 10:39Speaker 3: you need to make that payment before April fifteenth, otherwise
- 10:42Speaker 3: you'll owe penalties.
- 10:43Speaker 2: But if you don't have all.
- 10:45Speaker 3: Of your documents together, or if you're missing some maybe
- 10:47Speaker 3: k ones or ten ninety nine's that you're going to
- 10:50Speaker 3: need a lot of people file an extension gives them
- 10:53Speaker 3: to you in the middle of October to get everything
- 10:56Speaker 3: fully filed with their tax return. And so that is
- 11:00Speaker 3: a great strategy. It's not even really strategy, it's just
- 11:03Speaker 3: a times buyer. If you don't have everything fully put
- 11:07Speaker 3: together now again, if you still are going to o taxes,
- 11:10Speaker 3: you should make an estimated payment and try to overshoot
- 11:13Speaker 3: what you believe you're going to owe, because then that
- 11:15Speaker 3: will come back to you when you file the return
- 11:18Speaker 3: as a refund. But yes, a lot a lot of
- 11:20Speaker 3: crypto investors do file extensions for kind of these reasons.
- 11:25Speaker 1: What is the one tip now that let's you know,
- 11:27Speaker 1: it's past April fifteenth, we're already starting to prepare for
- 11:31Speaker 1: next year twenty twenty six. Is there anything a tax
- 11:34Speaker 1: planner should do now someone that's starting to say, Hey,
- 11:36Speaker 1: I'm going to really start to get ahead of this game.
- 11:39Speaker 2: Yeah.
- 11:39Speaker 3: I think the biggest thing is take a look at
- 11:42Speaker 3: what assets you're holding are underwater or not, meaning what's
- 11:46Speaker 3: in a lost position or what's not Because tax loss harvesting,
- 11:49Speaker 3: while it's most commonly done in December, can be done
- 11:52Speaker 3: at any point throughout the year. So if you, for example,
- 11:56Speaker 3: let's say, are expecting a large gain in some other
- 11:59Speaker 3: asset class. Let's say you're selling your house this year,
- 12:02Speaker 3: or you have a big run on some AI stocks
- 12:04Speaker 3: that you've been investing in, and if you're down in
- 12:07Speaker 3: a crypto position, it can be smart to, hey, realize
- 12:10Speaker 3: that right now, you lock in that loss by back in,
- 12:13Speaker 3: and then you know you can offset against the expected
- 12:16Speaker 3: capital gain.
- 12:17Speaker 2: And so it's smart from.
- 12:19Speaker 3: Like a tax planning perspective to try to match those
- 12:22Speaker 3: losses in the gains because those are going to net
- 12:24Speaker 3: out on the year, the tax year.
- 12:27Speaker 1: Well, you just hit on something, and that is, you know,
- 12:30Speaker 1: the wash rule, being able to jump back into that
- 12:32Speaker 1: same asset and the only variance would be maybe a
- 12:35Speaker 1: few days of trades. That is a huge strategy, I think.
- 12:39Speaker 1: And back to your point, because where the market is
- 12:41Speaker 1: right now, you could take that loss. I agree, especially
- 12:44Speaker 1: if you are up against maybe house sale or maybe
- 12:46Speaker 1: some gold sales or other assets of business, etc. That
- 12:49Speaker 1: could start to play into that. I want to go
- 12:52Speaker 1: over to our lightning round and ask you a few questions.
- 12:55Speaker 1: Do you think Congress is going to pass a crypto
- 12:57Speaker 1: tax related bill this year?
- 13:00Speaker 3: No?
- 13:00Speaker 2: If you don't count the clarity stuff, all.
- 13:03Speaker 1: Right, So not on that one. Who is more to
- 13:06Speaker 1: blame for the twenty six crypto tax reporting nightmare.
- 13:10Speaker 2: If I had to choose Biden?
- 13:12Speaker 3: More so is when the really owner's stuff got passed
- 13:15Speaker 3: and now it's being implemented now.
- 13:17Speaker 1: I see, Okay. And then as far as the issue
- 13:21Speaker 1: on one big beautiful bill tax cuts worth the economic
- 13:25Speaker 1: chaos in terms of Trump's war, healthcare cuts and inflation
- 13:29Speaker 1: all that, what do you.
- 13:30Speaker 3: Think now, that's a tough on I'm like in the
- 13:32Speaker 3: middle of this, but I'd have to go with disagree, disagree?
- 13:36Speaker 2: Oh, okay, all right?
- 13:38Speaker 1: And then what crypto? Would gen Z spend their tax
- 13:41Speaker 1: refund on? Bitcoin eight or meme coins in Nvidia?
- 13:45Speaker 2: Oh?
- 13:45Speaker 3: I feel like I'm disconnected for this, but I'm gonna
- 13:47Speaker 3: go bitcoin and eat bitcoin eat for.
- 13:50Speaker 1: The gen Z crowd. I kind of agree with you there.
- 13:52Speaker 1: I think it will be bitcoin eth for sure. What
- 13:55Speaker 1: would you recommend people use their tax refund for payoff
- 13:59Speaker 1: debt or.
- 14:02Speaker 3: I? Right here, right now, I would pay off debt
- 14:04Speaker 3: if that's what people are.
- 14:06Speaker 1: Sitting away from the high interest. That's I'm on your
- 14:08Speaker 1: that's the Dave Ramsey point, get away from debt. Tax
- 14:13Speaker 1: advisors should be replaced by AI agents. Are you guys
- 14:16Speaker 1: using any kind of AI within coin Ledger right now?
- 14:20Speaker 2: Yeah?
- 14:20Speaker 3: That's our biggest push internally, actually is and that's the
- 14:23Speaker 3: biggest growth of our business is our professional service offerings.
- 14:26Speaker 3: And we're laying in AI agents to handle a lot
- 14:30Speaker 3: of those day to day, heavy manual tasks.
- 14:34Speaker 2: So I'm going to agree.
- 14:35Speaker 3: I don't know what should should they be replaced, but
- 14:38Speaker 3: they overtime will more and more now it takes a
- 14:41Speaker 3: long time for these technology to really distribute.
- 14:43Speaker 2: But I agree on that.
- 14:45Speaker 1: So when you say you're you're adding it into your
- 14:48Speaker 1: professional services.
- 14:49Speaker 3: What is that? Yeah, so we coin lecturer will do
- 14:52Speaker 3: your crypto taxes for you. So if you don't want it,
- 14:55Speaker 3: you're the agent. Yeah, if you don't want to do
- 14:59Speaker 3: it yourself, our team will just do it for you.
- 15:01Speaker 3: Now obviously we charge much more money for that. Okay,
- 15:04Speaker 3: but that's a very manual process. We go through your
- 15:07Speaker 3: whole account, we reconcile all of your trades, we make
- 15:09Speaker 3: sure everything's being reported correctly. Now we can really layer
- 15:13Speaker 3: in smart agentics workstreams to do a lot of that
- 15:17Speaker 3: heavy work.
- 15:18Speaker 2: Right.
- 15:18Speaker 3: Hey, this AI agent will run through a whole customer's transactions,
- 15:21Speaker 3: figure out this all should be labeled income, These should
- 15:24Speaker 3: be marked as transfers, et cetera.
- 15:26Speaker 1: Yeah, all right, I didn't know you guys had that.
- 15:28Speaker 1: So that's good news for that. Anything else you guys
- 15:31Speaker 1: are planning for, you know, working on this year, for
- 15:34Speaker 1: the twenty six year that you can kind of share.
- 15:37Speaker 3: Yeah, the biggest thing we'll be leaning into this so
- 15:39Speaker 3: we will be offering more and more full service offering.
- 15:43Speaker 3: So we will do your tax returns for you, We
- 15:45Speaker 3: will do all of your crypto reconciliations for you. And
- 15:48Speaker 3: this is the fastest growing line of our business, and
- 15:50Speaker 3: so we're really leaning in building a lot of smart
- 15:53Speaker 3: technology to kind of be able to do that really well.
- 15:56Speaker 1: Listen. I think that's a good product because so many
- 15:59Speaker 1: CPAs right now run away from this, you know, they
- 16:02Speaker 1: just don't understand enough about it, and they just don't
- 16:04Speaker 1: obviously they don't want to get in sideways with a client.
- 16:07Speaker 1: So I think that'll be a big benefit. Do you
- 16:09Speaker 1: think that when Okay, first of all, I guess my
- 16:12Speaker 1: question to you is have you elevated that up into
- 16:15Speaker 1: where you will do it for a managed trust that's
- 16:18Speaker 1: also dealing with that rather than just a personal tax.
- 16:22Speaker 3: Have not gotten in there, But I'm sure as we
- 16:26Speaker 3: really sink our teeth in to like just full personal
- 16:30Speaker 3: tax returns, we'll get a lot more feedback from the market.
- 16:33Speaker 2: So I can't say not yet, but that's an interesting one.
- 16:36Speaker 1: I know a lot of people this over this last
- 16:38Speaker 1: year they had been going and putting a lot of
- 16:40Speaker 1: their assets into managed trust and several people that come
- 16:44Speaker 1: to our you know, seminars keep talking about this, and
- 16:47Speaker 1: one of the problems they face is the tax issues
- 16:51Speaker 1: down the road because either their CPAs or their accountants
- 16:54Speaker 1: don't completely understand the crypto side of it. They understand
- 16:58Speaker 1: the other stuff, but the crypto side of it is
- 16:59Speaker 1: usually what buddies of the water. So anyway, David listen,
- 17:02Speaker 1: thanks for coming in today.
- 17:03Speaker 2: Thank you always good to chat.
- 17:05Speaker 3: Paul. I'm glad you're doing well.
- 17:13Speaker 1: If you like this video, like and subscribe, drop a
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