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Oregon Supreme Court approves tax to fund state EV rebates

Original Article by Catherine Morehouse

Oregon Supreme Court approves tax to fund state EV rebates

  • The Oregon Supreme Court approved the use of a privilege tax to fund the state’s Clean Vehicle Rebate Program on Sunday, after AAA Oregon/Idaho and Trucking Associations Inc. challenged the tax in November 2017, saying it violated Oregon’s Constitution.
  • The program is integral to Democratic Gov. Kate Brown’s 2017 initiativeto address greenhouse gases and climate change. One of the goals of the initiative is to have 50,000 or more registered and operating electric vehicles (EVs) in the state by 2020, according to Oregon Department of Environmental Quality (DEQ) air quality planner Rachel Sakata.
  • The clean vehicle program offers both a standard rebate option and a “charge ahead” option for qualifying low-to-middle income (LMI) customers. The standard rebate is $2500 towards a purchase or lease of a new EV with a battery capacity of 10 KWh or more, and $1500 with a battery capacity of less than 10 KWh. Charge-ahead rebates are worth $2500-$5000.

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Cryptocurrencies and Taxes

Article Highlights:

  • Virtual Currency
  • Valuation
  • Transactions
  • Character of the Gain or Loss
  • Foreign Currency Transactions
  • Foreign Bank and Financial Account (FBAR) Reporting
  • Payment for Goods & Services
  • Acquiring Virtual Currency
  • Virtual Currency Mining
  • Employee Payments
  • Independent Contractor Payments

As our world has become more and more “digital,” it was only a matter of time before cryptocurrencies were developed. One of the first of these virtual currencies was Bitcoin, and the Bitcoin network came online in 2009. Since then, additional cryptocurrencies have been developed.

Cryptocurrencies are generally utilized for transactions by tech-savvy individuals and have a comparable value in real currency or take the place of real currency. These virtual currencies can be purchased with or exchanged into U.S. dollars, euros, and other real or virtual currencies.

Valuation – The value of a virtual currency is based upon market value, i.e., what a willing buyer will pay a willing seller – much like trading in stocks. On February 15, 2018, when this article was written and according to Oanda (an online currency converter), a Bitcoin, one of the more popular virtual currencies, was worth $9,025, and one was worth $995 one year earlier.

It took several years for the IRS to come up with guidance on how to deal to transactions involving virtual currencies. It finally issued Notice 2014-21 determining that virtual currency is treated as property and that the general tax principles applicable to property transactions apply to transactions using virtual currency. This can best be illustrated by example.

Example A: Taxpayer buys Bitcoins (BTC) to use when making online purchases without the need for a credit card. He buys one BTC for $2,425 and later uses it to buy goods (BTC was trading at $2,500 at the time he made his purchase). He has a $75 ($2,500 − $2,425) reportable capital gain. This is the same result that would have occurred if he had sold the BTC at the time of the purchase and used U.S. dollars to purchase the goods. This example points to the complicated record-keeping requirement to track BTC’s basis. Since this transaction was personal in nature, no loss would be allowed if the value of BTC had been less than $2,425 at the time when the goods were purchased.

 

Example B: Taxpayer buys Bitcoin (BTC) as an investment. The same rules apply as for stock transactions. Gains are taxable in the year realized, and any resulting loss, when combined with the other capital transactions for the year, are limited to $3,000 ($1,500 if a married taxpayer filing separate).

Character of the Gain or Loss – The character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is held as a capital asset. For example, stocks, bonds, and other investment property are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the sale or exchange of virtual currency that he or she does not hold as a capital asset. Inventory and other property held mainly for sale to customers in a trade or business are examples of property that is not a capital asset.

Foreign Currency Transactions – Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.

Foreign Bank and Financial Account (FBAR) Reporting – The IRS has stated a few years ago that virtual currency transactions need not be reported for purposes of Foreign Bank and Financial Account (FBAR) reporting. But the IRS cautioned that its position could change in the future. However, the IRS has not issued any announcements regarding a change in its position on FBAR filings for years through 2017.

Payment for Goods & Services – A taxpayer subject to U.S. taxation who receives virtual currency as payment for goods or services must, in computing gross business income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received.

Acquiring Virtual Currency – One can go to online exchanges and purchase virtual currency. But care should be taken to make sure the exchange is reputable. Once you have the virtual currency in your online wallet, you are free to spend it with anyone who accepts that form of currency.

Virtual Currency Mining – Mining is a term used to describe how cryptographic information distributed within a virtual currency network is secured, authorized, and approved. In essence, it is the processing of payments that have taken place once they occur. It takes the place of banks, merchants’ accounts, and clearing houses like Visa. It essentially eliminates all of the third parties’ cuts of income from the transaction. It involves complex mathematical logarithms that need to be solved, and the mining process completes this task autonomously. For individuals who mine virtual currency, it is a trade or business, and they are subject to self-employment tax.

Apparently, virtual currency miners are also subject to Form 1099-K filing requirements if their transactions rise to the reporting threshold. In general, a third party that contracts with a substantial number of unrelated merchants to settle payments between the merchants and their customers is a third-party settlement organization (TPSO). A TPSO is required to report payments made to a merchant on a Form 1099-K, Payment Card and Third-Party Network Transactions. If, for the calendar year, both (1) the number of transactions settled for the merchant exceeds 200 and (2) the gross amount of payments made to the merchant exceeds $20,000, then 1099-K filing is required.

Employee Payments – If an employee is paid in virtual currency, then the fair market value of the virtual currency, measured in U.S. dollars, paid as wages is subject to federal income tax withholding, Federal Insurance Contributions Act (FICA) tax (Social Security and Medicare A), and Federal Unemployment Tax Act (FUTA) tax and must be reported on Form W-2, Wage and Tax Statement. The U.S. government doesn’t accept virtual currency for tax payments.

Independent Contractor Payments – The fair market value of virtual currency

received for services performed as an independent contractor, measured in U.S. dollars as of the date of receipt, constitutes self-employment income to the independent contractor and is subject to the self-employment tax. Payments are subject to the normal 1099-MISC reporting requirement when the payments for the year measured in U.S. dollars are $600 or more.

IRS Enforcement Actions – Because fewer than 900 taxpayers reported virtual currency gains and losses each year on their tax returns from 2013 to 2015, the IRS is stepping up enforcement of the rules. Recently, the IRS won a court’s approval for a summons to obtain account and transaction information on more than 14,000 customers from Coinbase, a company that services buyers and sellers of Bitcoins. Based on the success in the Coinbase case, the IRS will likely expand its efforts to obtain information about cryptocurrency account owners from other companies dealing in Bitcoins and similar virtual currencies.

Also, beginning with 2018 returns, Sec. 1031 tax-deferred exchanges will only apply to real property; thus, investors in virtual currency who trade one type of virtual currency for another will be required to report their capital gains/losses and won’t be able to use the 1031 tax-deferral rules.

If you are investing, trading, or dealing in virtual currency and have any questions about how those activities will affect your tax situation, please give this office a call.


Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goals at Isler NW is to earn our clients’ trust as their primary business and financial advisors.

Isler Northwest

(503) 224-5321

1300 SW 5th Avenue
Suite 2900
Portland, Oregon 97201

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New Malware Steals Your Credit Card Info via Text

Article by Rob Price | Found on INC.COM

It’s wise not to enter your credit card details into shady-looking apps and websites if you don’t want your details stolen.

But sometimes, not even the apps you know and trust are safe.

A piece of malware detailed in a blog post from security firm Kaspersky is able to quietly steal victims’ details when they enter them into apps, as well as spy on their texts and phone calls.

It’s called Fakedtoken, and has been evolving over the last year — growing increasingly sophisticated. Read more

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The Technology That Will Change Accounting

Article by Levi Morehouse | Found on Forbes

Lots of people speculate about the next big innovation that will take their industries by storm.

In the realm of accounting and finance, there is a major technology often misunderstood by professionals that could dramatically change the game for the financial services industry.

That technology is blockchain. Read more

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What Entrepreneurs Need to Know About Ransomware

Article by Sean Stein Smith | Found on Inc.com

The issues of cybersecurity and ransomware tend to have a lifecycle that resembles income taxes and college basketball. Periodically, there is a tremendous amount of interest in these issues, endless articles, podcasts, and live news updates cover breaking developments, and then just as quickly the entire conversation recedes to the background. That said, cybersecurity and ransomware are not issues that can be effectively managed with only periodic attention, as the WannaCry ransomware attacks clearly illustrate. Read more

Stop Robocalls to Your Cellphone With Nomorobo

By Greg LaFollette, CPA/CITP, CGMA | Found on Journal of Accountancy

Many people claim privacy is dead, and more and more of us tend to agree. As much as some aspects of technology seem to hasten the probable demise of privacy, other aspects arise and appear to be saviors. One specific privacy threat and a related solution are the subject of this month’s column—robocalls. Read more

Hooked on Our Smartphones

By Jane E. Brody | Found on New York Times

The many men, women and children who spend their days glued to their smartphones and social media accounts might learn something from Lin-Manuel Miranda, creator of the groundbreaking megahit “Hamilton.” Asked in an interview with Delta Sky magazine when and where he finds time to be creative, Mr. Miranda, an avid reader of books and enthusiast for unfettered downtime, replied: “The good idea comes in the moment of rest. It comes in the shower. It comes when you’re doodling or playing trains with your son. ‘Hamilton’ forced me to double down on being awake to the inspirations of just living my life.”

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Latest Updates On the Technology Sector in 2017

The year 2017 was very eventful for the Technology sector as there was something new better and more advanced coming up every month for the tech savvy people that made things better for them. There have been more than 2000 different additions in the technological world starting from lifestyle, medicines, luxury, cars, security, construction and a lot more other fields as well.

Latest Updates On the Technology Sector in 2017

As you know that technology touches every aspect of human life here, we will be discussing on 4 of the mega technological advancements that have happened in various fields and have improved human life. Check Out iMac Plus Tutorials

So let’s start on with this small journey where we discuss technological advancements all across the globe in various spheres.

  • Lifestyle

Technology has brought in a huge change in the lifestyle of people as due to this people now have a lot of luxury which was actually a dream for them once. To start with is the automatic house where you have each and everything automatic for example you enter your home and clap and all the lights come on then you have these modernised temperature control systems where as soon as you enter into a room the sensors attached in different parts of the room regulate the temperature of the room automatically as per your need.

  • Medicines

The advancement of technology has become so very good that people who are in advanced stages of cancer can also be treated using nanotechnology until and unless their condition is out of control. They have invented these capsules that have gold Nanopowder or Nanoparticles inside them which once consumed migrate by themselves to the place where cancer is there and surround it. When chemotherapy takes place, they get heated very fast and destroy the cancer cells finally making the treatment a successful one.

  • Education

One of the best things about the internet is that it is very educative as this is also an ocean of knowledge for people who know to use it. When it comes to Technology helping out teachers, there are these E-Classes where a teacher can use the internet to teach children. Then the students can also refer to the internet for their reference on any given topic. The companies owning search engines have made sure that the information provided on the sites is perfect and up to date helping more and more students.

  • Electronics

The first technological advancements that you see come in the field of electronics itself and this year was really an exceptional one when it comes to electronics. The giants in the electronics industry used to world-class Technology to make new and better gadgets for their customers worldwide and actually have gained a lot through this.

Technology Replacing Workers

The End of Work as We Know It

PARIS – In 1983, the American economist and Nobel laureate Wassily Leontief made what was then a startling prediction. Machines, he said, are likely to replace human labor much in the same way that the tractor replaced the horse. Today, with some 200 million people worldwide out of work – 30 million more than in 2008 – Leontief’s words no longer seem as outlandish as they once did. Indeed, there can be little doubt that technology is in the process of completely transforming the global labor market.

To be sure, predictions like Leontief’s leave many economists skeptical, and for good reason. Historically, increases in productivity have rarely destroyed jobs. Each time that machines yielded gains in efficiency (including when tractors took over from horses), old jobs disappeared, but new jobs were created. Furthermore, economists are number crunchers, and recent data show a slowdown – rather than an acceleration – in productivity gains. When it comes to the actual number of jobs available, there are reasons to question the doomsayers’ dire predictions. Yet there are also reasons to think that the nature of work is changing.

To begin with, as noted by the MIT economist David Autor, advances in the automation of labor transform some jobs more than others. Workers carrying out routine tasks like data processing are increasingly likely to be replaced by machines; but those pursuing more creative endeavors are more likely to experience increases in productivity. Meanwhile, workers providing in-person services might not see their jobs change much at all. In other words, robots might put an accountant out of work, boost a surgeon’s productivity, and leave a hairdresser’s job unaltered.

The resulting upheavals in the structure of the workforce can be at least as important as the actual number of jobs that are affected. Economists call the most likely outcome of this phenomenon “the polarization of employment.” Automation creates service jobs at the bottom end of the wage scale and raises the quantity and profitability of jobs at its top end. But the middle of the labor market becomes hollowed out.

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Apple's Health Tech Takes Early Lead Among Top Hospitals - Isler NW

Apple’s Healthcare Technology Takes Early Lead Among Top Hospitals

Apple Inc’s healthcare technology is spreading quickly among major U.S. hospitals, showing early promise as a way for doctors to monitor patients remotely and lower costs.

Fourteen of 23 top hospitals contacted by Reuters said they have rolled out a pilot program of Apple’s HealthKit service – which acts as a repository for patient-generated health information like blood pressure, weight or heart rate – or are in talks to do so.
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