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2023-09-21

How Investing vs Trading impacts tax

In most cases of buying and selling cryptocurrency as a retail investor, you are participating in investing rather than trading. The two are treated differently for tax purposes.

  • Investing is subject to capital gains tax or income tax, depending on the nature of the transaction.
  • Trading in this case refers to self-employment which is subject to income tax and National Insurance Contributions.

The key difference between investing and trading – along with the different tax treatments, is how losses generated in the crypto-activity can be used.

In their guidance, HMRC have explicitly stated that they would expect it to be exceedingly rare that any crypto-activity constituting buying & selling crypto would be classified as “trading”.

If you are uncertain, speak to a tax advisor as there are always exceptions, including but not limited to, developing tokens and large scale mining.

How is crypto tax calculated in the United States?

You can be liable for both capital gains and income tax depending on the type of cryptocurrency transaction, and your individual circumstances. For example, you might need to pay capital gains on profits from buying and selling cryptocurrency, or pay income tax on interest earned when holding crypto.

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Security Update

Security update

Key takeaways
This tax guide is regularly updated: Last Update  
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We are providing an update on steps taken by Summ (formerly Crypto Tax Calculator) since becoming aware of a potential sophisticated phishing scam targeting our customers, which we identified as a result of a cyber incident against our third-party provider.

Since our last update, we have been working with a team of external experts to investigate. We have also notified Australian privacy regulators with the required details and the outcomes of our investigations.

Our investigation confirmed there was unauthorised access into Summ’s system. General information was exposed such as user IDs, email addresses and password hashes; and in some instances, chat logs, public blockchain wallet addresses, and cryptocurrency exchange names. Some internal administrative Summ information was also exposed.

This information does not allow access to or transfer of funds via your cryptocurrency exchanges or blockchain wallets. Summ only manages the record keeping obligations of its users, and funds cannot be accessed through our platform. Furthermore, Summ does not collect government-issued identity documents, nor will we ever ask users for private keys, write-access exchange API keys, or to sign a wallet transaction that could enable the transfer of funds.

The accessed information may increase the risk of exposure to a potential sophisticated phishing scam attempting to trick users into releasing further information.

At this stage, Summ has no information to suggest this has happened. Summ strongly recommends all users remain vigilant and adhere to the following security measures:

  • While all Summ user passwords are secured with robust one-way encryption, we recommend that all users still adopt a best practice approach to the security of your passwords. This includes rotating your password on Summ and other platforms, and the utilisation of a password manager.

  • Make sure you do not share private keys or write-access API keys with unknown third parties. As a reminder, Summ or affiliated sites will never ask you for private keys, write-access exchange API keys, or to sign a wallet transaction which allows for transfer of funds.

  • Check all URLs to ensure it is the website that you are intending to visit.

  • Remain vigilant and validate all communications from Summ. For any suspicious or unauthorised activity, report this to [email protected] and we will promptly review it.

In response to this incident Summ has taken steps to reinforce the integrity of our systems and no further illegal activity has been detected. The Summ platform remains safe, secure and accessible for its users.

Summ sincerely apologises to all users for any concern or inconvenience this may have caused.

We are committed to the highest standards of security and data integrity and encourage all users to remain vigilant and adhere to the steps outlined above to preserve data security.

As informações fornecidas neste site são de natureza geral e não constituem aconselhamento fiscal, contábil ou jurídico. Ele foi preparado sem levar em consideração seus objetivos, situação financeira ou necessidades. Antes de agir com base nessas informações, você deve considerar a adequação das mesmas à luz de seus próprios objetivos, situação financeira e necessidades, e procurar aconselhamento profissional. Summ (antes Crypto Tax Calculator) isenta-se de todas as garantias, compromissos e garantias, expressos ou implícitos, e não é responsável por qualquer perda ou dano de qualquer tipo (incluindo erro humano ou de computador, negligência ou outro, ou perda ou dano incidental ou consequente) decorrentes de ou em conexão com qualquer uso ou confiança nas informações ou conselhos deste site. O usuário deve aceitar a responsabilidade exclusiva associada ao uso do material neste site, independentemente da finalidade para a qual tal uso é aplicado ou dos resultados. As informações contidas neste site não substituem o aconselhamento especializado.

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