 Welcome digital asset news to get top stories and cryptocurrency digital assets and bring them down to bite-sized pieces today. We've got some concerning news about what's going on in the markets and I'm going to lay it all out to you and you make the decision but in all honesty it's just a Friday. So first up this happened yesterday. Biden will seek a tax increase on the rich to fund a child care education. This is the President of the United States, Joe Biden, and why this really has caused mass panic when there probably shouldn't be. On top of that I'm going to talk about how this first bill we talked about could just be a distraction for one of the main bills that just came about which House Democrats passed the bill to make DC the 51st state. Still has to get to the Senate but I got to tell you this is where it all comes down to sleight of hand and magicians using their sleight of appearance about what is going on. So we'll take a look at those two things and then we're going to bring in She-Han Chandrasekara who is our everybody's favorite crypto CPA to calm everybody down about what is going on with this bill. But first let's take a look at what the heck happened in the market yesterday, huh? Crazy. So we had a market cap of over two trillion and now we'd lost 150 billion. What are you going to do? So again traditional markets, once this story broke the traditional market just took a huge dive and in our markets we lost 150 billion but you know hey this is crypto and we are still affected by the tides of different things that are going on outside of our realm of control. So we've got Bitcoin price 49,000 and one thing I want to talk to you about trade the chain sentiment analysis right takes a look at all the different things are going in the internet mostly Twitter and the websites for exchanges and cryptocurrency whatnot. There still is I want to show you a sentiment of what people are really feeling about what's going on. Let me blow this up so you can see it. This was a surprising to me and that is you see that daily sentiment for Bitcoin bearish. I'm not surprised on that but what I am surprised is the neutrality that's going on in the top four or five currencies a couple bearish here but still very neutral and people are not really flipping out and there's some a little bit of bullish here and there and some bearish whatnot. So who's very bullish? Who is this pirate chain? Well I got to get some of that. That's enough. I've been covering I've been on trade the chain for like 10 days straight and it's always pirate chain going you know very positive sentiment. I'm going to take a I'm actually going to have to take a video on this one but yeah so I mean Bitcoin dropped below 50,000 we're at 49 people were saying if it dropped below 50 it was going to 45 but it went to 48 and picked right back up. Ethereum is still 2317 Binance kind of 502 and you can see right here in 24 hours yeah there was a big dip but if you were like me you're just like thanks and yesterday what did I do? I bought Cardano, I bought StormX and I bought Voyager. Now if you watched my video yesterday on Voyager of what's going on I didn't say anything about how you know awful a tokenomics was I was just talking about the exchange itself and what was going on I still believe in the team still believe in anything so that's a different story. Watch the video I'll link at the very end but things are going pretty good in all honesty I mean yeah we lost a pretty good market cap but look we me and you have really taken our brunts and this is just like it was affecting some people but for us we've been here give us the facts and we'll go from there so let's just jump in and see and see what everybody was flipping out about over everything so Joe Biden came out President Joe Biden came out and said look I'm going to tax the limit heck out of people who make more than a million bucks for their capital gains which is really bad right for for people make a million dollars and that's awful and this is what he said he goes look I'm gonna this isn't a direct quote he said but this is from the paraphrase I'm gonna raise taxes on capital gains the proceeds of selling an asset like a stock or a boat or cryptocurrency for people earning more than a million this is very vague I would say this and she ends gonna talk about in a second effectively increasing the rate that pay on that income to 39.6% from 20% so basically doubling and this is long term capital gains apparently right it's it's very jumbled and very muted but again I will remind you and we'll talk about this again Janet Yellen came out not too long ago and two or three months ago and said hey we're going to tax you on your unrealized capital gains and people are like what and she just said that in passing and then she kind of retracted later but that even caused a big dip so again when people say news doesn't move the markets you're wrong news does move the market and that's just the truth so this is what's going on we don't really have much information this is just some that's you know it's like hey I'm thinking about doing it if you're out of the United States first of all you know it has to get through the House of Representatives which this bill did right here but then after that it has to be talked about and actually agreed upon by Senate and right now all the senators it's a direct 50-50 split in the United States we've got like you know 50 Democrats and 50 Republicans and if they all vote on the party lines then the person that would actually break that vote would be the vice president who's also Democrat so if this actually goes through okay then off we go I I can't tell you if it is or it isn't the real question is is when does it go into effect and I'll let Sheehan talk to you about that so House Democrats this is but this is what I was really thinking about he just came out and said it there's really no bill coming forth there's nothing on paper but this has already gone through House Democrats passed the bill to make DC the 51st state in in the US and if you're outside the US it doesn't apply to you it doesn't really matter this does because we just saw what happened with the price of cryptocurrency this affects everybody but if you're like me you're just like great thanks for the discount so I'm not gonna this is all political stuff and I'm gonna read it let me just talk to you real quick so here's the thing the reason why this went through debatable right but it does look like it's a little bit of a power type of grab and people can debate this all the time I don't really care but Democrats really want this and that's fine you know that whatever it is but to me it kind of feels like Joe Biden's like all right so we're gonna do this thing with capital gains and money and all the things that are happening and watch over here and what's this and what's this behind your oh uh 51st state to me it's just like like magician's sleight of hand so in all honesty they got this through the House of Representatives now they have to get it through Senate but this a little bit different they have to have uh I think it's like 60 votes or whatever else so we'll see if this actually goes through I think in all quite all honesty is that if you're all about negotiation you know how this works in in in Congress and going forth uh you don't start with your real number you start super high and you start to work things around then you go that way because uh just because you know they say well there's you know there's there's there's there's Democrats in there they're gonna jam it right through not so uh it's all about political power and what you can actually get later on for what you really want whatever that is so if you want to spend all your capital on this one go right ahead but on different things where you have to have some kind of super majority it's not gonna go through these are just my my musings um I think that there will be a tax raise there has to be because that's what's that's the whole thing with this helicopter money that we got someone's gonna pay for it and it's gonna be you and me and that's just how it is so what I really want to do is just kind of break this down and just tell you like this when in doubt zoom out there's been a lot of different things that have happened in this market a lot of different things that have made people panic and whatnot but you just have to sit back and go what's really going on who's this really effect and how can I use this to my advantage so what I want to do is I want to bring in Shian Chandra Zikara we're going to talk about uh the you know accounting side of this and what he has seen in the past at as far as raising of taxes since he is an expert and let's just jump in and talk to him all right so everybody so we took a look at what's going on in the current news cycle and thankfully our man here Sheehan Chandra Zikara everybody's favorite accountant as far as crypto currency goes was gracious enough to come on the show and just answer a few questions Sheehan thanks for coming by yeah thanks for having me yet again my man yeah so what I'm going to do is I'm going to quickly share my screen and just to make sure we a quick recap tax rates for long-term capital gains remember long term is over if you hold hold everything for a year then here's then here's what we have and then short term if you sell before a year then you're going to pay pretty much just like it is in the normal tax rates only for Americans of course so long-term cap gains it just depends you can you can pay if you're if your filing status is is single and you make $39,999 then you pay 0% rate on your cap gains and then it just kind of goes over but really if you're looking at it 15% is up to $441,000 which is a lot and over that is 20% head of household almost the same thing up to $469,000 married filing jointly $496,000 and married filing separately over $248,000 so just keep in mind of that and if they're all selling at short term that's pretty much just whatever you make and the top percentage is 37% which as we talked about it's going to probably go up to 39.6 or somewhere around there that's only for people who make over you know half a million dollars so that's a nice little recap and I brought on Sheehan for a little bit of history and and he'll talk about that and then what this all could potentially mean because we have no facts right now we have no facts and people running around like a chicken with their head cut off so Sheehan take it away tell us what's really going on or potentially going on yeah I guess the big news is that you know if you look at media like Bloomberg and Twitter everywhere everybody's like okay your long-term capital gain rate's gonna go from 20% to 39.6% plus another 3.8% for net investment income tax plus 13.3% for people who live in California so you could literally end up paying you know 50, 40, 55% according to what you hear but you know there's a lot of you know unknowns so let me break down you know one by one so the bidder is pretty much proposing that if you make a million dollars your long-term capital gains rate's going to go from 20% to 39.6% so first you had to understand okay you had to make million dollars because if you're making less than million dollars there's barely any impact for you there may not even be any impact now I actually wrote an article about this in Forbes and in 2018 IRS received roughly 150 million form 1040s in individual taxes and among them only 540,000 people had adjusted gross income over one million so that means there's less than you know one person of the tax filers who would be subject to that you know doubled tax rate if that were to happen again these are just proposals right so there's just one five that's going on everybody has to pay you know 40% tax rate so that's not going to happen if you're a millionaire there's a small likelihood and number two we don't know yet how that one million's going to be applied we don't know if that one million threshold is for taxable income or just a gross income is it applied per household per person we don't know those things yet so yeah so that's that's what's really happening and then that's on the long-term capital gain tax side and for the short-term capital gain tax side the highest tax rate we have right now is 37% and Biden is proposing to increase it from 37 to 39.6% for the highest income bracket and again 37 to 39.6 it's not a big deal it's a slight increase but I guess the people are worrying about this long-term capital gain tax the TLDR here is that if you if you don't have million dollars just don't don't worry about it yeah. So if you're less than a millionaire not a big deal and then I was thinking about it because in this I think in this bull run we're going to see a lot more millionaires come about as the bull runs starts to continue so the question I have for you was and you explained to me quite well I'll have to do it again if you wanted to cash out $999,999 with the crypto would you then be taxed at 20% based on what we know and then maybe at that million threshold let's say you go you cash out one million and one dollar so maybe that one dollar gets taxed at 40% but the $909,000 gets taxed at the max of 20% that's what I was hoping for but you had another opinion on that one. So the answer to that question you know depends on what type of capital gains that you're dealing with it could be short-term or long-term and again we are speculating here so I don't want to you know spray any fun. If it is you know short-term capital gains that million dollars used to be get used to have the 37% tax rate and now it would be a subject to 39.6 which is not a big deal in the grand scheme of things right but the long-term capital gains are it's not like a progressive tax so say that if Bidden were to say again I want to stress if this were to pass and if Bidden says everybody whose taxable income is over million dollars will now be subject to a 39.6% you know long-term capital gain tax rate right that means that entire 1.1 million will be subject to 39.6 versus 20%. Again I'm speculating here because we don't know the actual mechanics and the specifics but yeah we'll see so it could go either way we just don't know and then that is like like one of the big things so maybe it could but take us back a little time trip real quick. Talk to us real quick about Janet Yellen and maybe three or four months ago when she came out and said you know what we're looking at unrealized tax gains. Yeah this was the other you know tax but that we saw in 2021 Q1 so Janet Yellen came and said we are considering you know taxing your unrealized gains meaning those you know appreciated assets which you haven't sold. Yeah I mean in the beginning I was like okay this is never going to happen because you know first of all this is going to create so much issues and it's not this is not like equitable thing I know taxes suck but then when they introduce these laws you know they it has to be equitable so if you were to you know introduce you know unrealized gain taxes then you should be able to take the variety of unrealized losses and if that were to happen I'm pretty sure a lot of people will have unrealized losses and meaning they can write all things without realizing any losses and at the end of the day the government might be losing up and the second problem with that approach is that I mean you could have unrealized gains but if they're taxing on you and how you're going to come up with cash you have to pay the taxes on the unrealized gains because you haven't sold anything so those are the two reasons why you know that unrealized gain tax you know would not come that type of taxing system you know does exist if you elect to do so and you know there's this hedge funds and very high net put the individual who can be elected to you know be taxed under unrealized gains but those are edge cases and it's not going to be it's not going to be like a mainstream tax thing in my opinion it's not going to happen yeah and the reason I brought this up because when once that story broke people again lost their minds there was a little bit of a dip in the market they're like oh my god they're going to start to tax this on unrealized tax gains meaning if you had if you bought bitcoin for five thousand then it went up to fifty thousand and it's just sitting there you haven't sold it like you owe us uh you know forty five thousand dollars the math here forty five thousand dollars right now even though you haven't sold it like what the heck I can't and just like she had said well if you could do the unrealized tax gains and you can also unrealized tax losses I guess what's going to happen there well we're probably going to win in that situation so so again remember we don't even have the facts right now and you see everybody just kind of selling panic signs they want to get you're like well I got to sell everything now and I just don't think that people who have been around the block for a bit of time probably like you know what I'll wait it out because I've seen this whole dog and pony show before though the last question which I don't know if you can answer this but because you know she hand with all the different tax laws that come about I mean you see him you see him I'll come through but over time let's say that they first of all let's say this actually gets through the House of Representatives right yeah okay sure and then it it goes through the Senate and Senators says you know what up and down straight up and down we're going to pass this law and then you know there's a tie breaking whatever else and actually goes through if that if that law goes through this year the question I have is and this is this is the bait will they retro it to the very beginning of the year or could it go in effect that day or could it go in effect to like later on and that's if they even push this through that's the big question yeah no it's it's highly unlikely they're going to introduce laws that are retroactively affected like it's it's very unlikely because it's unfair for the taxpayer and and you know and so many other reasons if something were to happen it will most likely be effective starting January 1st 2022 and people will have you know okay amount of time to kind of plan their taxes and if they had to sell stuff they they would have time to to do it before those new laws go into effect perfect so this is my prediction goes I always said hey the bull run gonna run end in in December so hey maybe this will actually push my my prediction all the way there all right she hand hey man I know you're busy this is tax season if you are looking for a qualified crypto cpa this is my man she hand I definitely trust him if you got a lot of different questions or you want to work with somebody who's like hey I got a lot of things a lot of things going on cryptocurrency and my business and my personal reach out to she and I'm gonna link his information in the description below and that is it she hand thanks for coming by we really appreciate any last words of wisdom for everybody who's freaking out uh just just don't panic and nothing has been finalized and we don't even know the specifics it's just a proposal okay sound good thanks she hand we appreciate all right so I hope that helped so look this could take a little bit of time to really sort out again we don't have all the information and I will just say just just relax it's not going to be the end of the world and like we talked about who knows what it actually could be but uh the final product I think is gonna be a lot different than what we just heard about and yeah if you like today's video do me a favor hit the thumbs up that helps tremendously also consider subscribing a lot of things to talk about our time sensitive just like what we talked about today and that is it for this episode so thanks so much for stopping by I appreciate it see you on the next one