 Welcome to Digital Asset News. So today, this is our second video with CPA cryptocurrency professional She-Han Chandrasekhar. And I brought him in to answer a couple of questions, one of which was what it would be like to actually pay zero taxes by moving to Puerto Rico, which is territory of the United States. And the second thing I asked him was about Treasury nominee Janet Yellen. And when she was talking about taxing your unrealized capital gain, which sounds frightening at first, but he tells us that, yeah, it's been going on for decades. So this is why I try to bring as many professionals in and to really dig down into the actual things that are said so people don't flip out. So we've already talked about the Puerto Rico. You can check that video. I'll link at the very end. This is our second video, where we're going to talk about Janet Yellen and what she talked about as far as taxing unrealized capital gains tax. So enjoy this one. It's pretty great. Let's move on to our last piece, which is we were talking about this yesterday and the market had dropped precipitously. We had a Bitcoin of around $36,000, $37,000, $38,000, all the way down to $29,000 something. And it was based on three different things. One was Craig Wright and him enforcing his white paper for Satoshi Nakamoto, sure, whatever. Then he had Hayes here from Bitnex and his whole company. They came out with a double spend. But I think one of the biggest ones was Janet Yellen. She is the treasury nominee, and she came out and said a couple of things that were pretty interesting. The first thing was she said that cryptocurrency is used mostly for illicit activities. In the video yesterday, we had actually taken a really deep dive into everything that she said, and she said, yes, it is used for illicit activities, but also it can be used for good, just like the American dollar does. So that wasn't the issue. This was the issue. The issue was where she said that she was going to look at unrealized capital gains and tax that. Shiyan, can you talk to us about what that would mean if that was the truth? Yeah. So again, if this were to be true, what this would mean is, say you have purchased one Bitcoin for $1,000 in 2010 or something like that, and now we're sitting at $38,000. At the end of the year, you would do something called Mark-to-Market Accounting. So pretty much you would pay taxes on $39,000 worth of unrealized gains. So that's what she means by it. And that's without you selling it or anything else, just like, oh, it's there at some point. So here's another question. Let's say it was, like I give this example, let's say you find a Picasso or a Monet or a Jackson Pollock painting in your attic and you have it on your possession. You haven't sold it yet, but it's worth millions of millions of dollars. Would that be considered an unrealized tax gain? Correct. It includes those collectibles, stocks in public companies and also in private companies which are illiquid. So yeah, again, if this were to happen, so I just want to make sure that I get that message across very clearly. Okay. So you told me something very interesting, but let me just read to everybody what was actually said. Let me share my screen one more time. I think it's going to shed some light. So Yellen said Biden has not proposed a specific wealth tax, but would tax the investment income of families making more than a million at the same rate they pay on their wages and to tax some previously untaxed capital gains on the final return of wealthy taxpayers. So there's a couple of things to unpack. First of all, what do they mean by wealthy taxpayers? Is it a million, 10 million, 100 million, a billion? We have no idea. When I say some untaxed capital gains, at least that gives us a little bit of a wiggle room. And this was just put out today, matter of fact. So this is nothing, this is pretty much new. Again, always look a little bit deeper to make sure you get the right information, but she can't tell me something very interesting about tax laws and how that's going to work. So Cheyenne, take it away. Yeah. Again, as Dan mentioned, this news has created so much fraud. You know, fear of uncertainty and what's the, but it's decent. I forgot. What's that? Fear of uncertainty and... Oh, in doubt. See, we always forget one thing and always that noise the hell out of me. I know what you mean. Yeah. Yeah. I guess I think the first thing to understand is that these government officials, you know, these people are making comments and this is not even like a proposed rule. These guys are just having conversations right now. In order for such a drastic tax flow to chain, it has to go to the Congress. It has to be reviewed by some of the experts. You know, you had to consider how this would impact the economy as a whole. So I think number one advice, like what I would tell you is that just don't get triggered by, you know, when you see these headlines. That's number one. And number two, there are certain thresholds. It's not like it's going to get applied to every taxpayer, even if it ever happens. And the way that tax code work is that, you know, you have like a general rule and it's very, very complicated. Right now the tax code is like $80,000, $80,000 pages. So you have rules, you have thresholds, you have exceptions and even exceptions to the exceptions to the exceptions to make things even more complicated. So and you have to understand when you when you write, when you read these blog posts or in other general media, they cannot explain all these, you know, tiny nuances because that's because if that were to happen, like you wouldn't read these things. So they're trying to make these headlines, you know, very flashy. So they get the clicks and, you know, then it's they're creating enjoyable news. So that's number two. Number three, I mean, you just had to realize, you just had to kind of question how this is going to actually work, right? If everybody's going to be taxed, unrealized gains, how are people going to come up with the cash to pay taxes? So that's number one. And then the other question is in the case of things like, you know, collectibles and, you know, private private company stocks, like, who's going to determine the value? And there's associated costs with that. And people can play around with the market value because remember, you're paying, you know, the taxes based on the unrealized gains. So there's a lot of practical issues as well. And and that's those are those are some of the reasons why it just doesn't make any sense. This is just a comment made by, you know, a government official. And then lastly, you know, regardless of the country, I mean, the tax system should be equitable and fair. So again, if this were to ever happen, there should be a provision for you to write off unrealized losses as well to balance things, balance things out. And and I don't think government would like that option, because that means people will, that means I can guarantee you that people will find so much unrealized losses to claim on your tax return and get cash tax refunds for claiming those unrealized losses. So this is true. Yeah, that's the reason why this this was just a comment. It's it's not going to work for 99.9% of the Americans. But at the same time, I do want to tell you that there there is a regime for to tax unrealized gains. And if you make certain tax election, like, especially these hedge funds make these elections, and they pay taxes based on their unrealized gains at the end of the year. But when you make that election, you also get to write off unrealized losses. That's the thing I mean, it has to be equitable. So this is not like completely new thing. I mean, there's if you make certain election, if there's something to get it like a hedge fund, you could be taxed under under these unrealized gains and unrealized losses. So she answer just to make sure this actually happened. Does this happen right now with those hedge funds where they get taxed on some some unrealized tax gains? No, this this has been in the in the economy like decades. They it's called section, it's called section 475 election. I had no idea. So perfect because because the reason is like, you know, pure hedge fund, like you want to be able to deduct capital losses more than $3,000 because hedge funds are like, you know, go always going down. So yeah, again, the again, this is very, very sophisticated tax election. And people do that. Because then you get the benefit of unrealized gains and also get the benefit of claiming those unrealized losses and kind of offsetting your gains. But again, happens only in hedge funds. Got you. And that's probably why she talked about this, because this wasn't like some press conference. She said, we're going to do this. It was before a committee. It was a statement. She was answering a bunch of questions, I believe. So it wasn't like she's like, this is definitely going to happen. And this is the problem when you've got somebody because she was part, I think she was one of the chairs of the Federal Reserve. I believe so. Yellen. So it doesn't matter. She's she is has been entrenched in the financial system for quite some time. So when she says these things that goes over people's heads like me, not so much like you, Xi'an, but like the normal average Joe and Jane, they're like, what, unrealized tax? And we just flip out. Now that she said, hey, this has been happened for decades, and I can see where she's coming from. That makes a lot of sense. So Xi'an, thanks so much for explaining all these things to us and taking the time. Anything else before I give you another plug? No, I mean, if you guys have any questions, feel free to reach out to me or you know, my tour held the crypto CPA and I answer like, you know, 50, 60 questions every day. And make sure you follow taxes, right? There's this whole new crypto tax question on page one. And then don't panic. And if there's any changes to the tax, so it's going to get effective starting January 1st, 2022. And we'll get to know beforehand what exactly it will be. I mean, just don't, you know, try to go to Puerto Rico or anything like that, just based on these comments made by the government officials. Perfect. So yeah, so two things before we take off. So first of all, just like Xi'an was talking about, the IRS is transitioning from enforcement or to enforcement from an educational factor. And just like he said, just like Xi'an said, the form for the 1040, that did you purchase any virtual currencies is now front and center. It's not buried anymore. So there is that. If you are looking for the handheld, fantastic service that Xi'an does, I will link this below and you can just fill out. There is a pre-onboarding questionnaire. You can fill it out and go from there. And then also, if you are looking for, excuse me, any kind of software in the link below in the description, you can sign up to win a free unlimited report from CryptoTrader.tax. Also in that link, Dan, viewers get 20% off for CryptoTrader.tax for the tax software. Xi'an, again, I want to say thanks, my man. I know you have another appointment to go after this. So thanks for stopping by. Thank you. Thank you for having me. All right. Thanks.