Introduction
The city of Prospera in Honduras has recently taken a significant step towards the development of a pure bitcoin-based economy. On January 5, Prospera announced its decision to adopt bitcoin as a unit of account, allowing for prices and taxes to be denominated and paid using the digital currency.
Financial Freedom and Monetary Freedom
Jorge Colindres, General Secretary of Prospera, expressed his support for this groundbreaking decision. He emphasized the importance of financial freedom and monetary freedom, stating that individuals should have the right to carry out transactions, conduct accounting, and report taxes in the currency of their choice.
Paving the Way for a Bitcoin Circular Economy
By adopting bitcoin as a unit of account, Prospera opens up possibilities for the establishment of a bitcoin circular economy within the city. This move presents an exciting opportunity for residents and businesses, as it paves the way for a modern and efficient economic ecosystem in this pioneering city.
It is worth noting that bitcoin has been recognized as legal tender in Prospera since 2022. However, the payment of taxes with BTC is currently on hold due to external regulatory issues and technical limitations involving the adopted electronic tax payment system. As a result, tax duties will be declared in bitcoin but reported to authorities in U.S. dollars or Honduran lempiras.
Independent Decision-Making
While there were rumors about Honduras adopting bitcoin as legal tender in 2022, the country's central bank quickly clarified that bitcoin was not a regulated currency and did not hold the status of legal tender. The central bank also expressed concerns about the risks associated with cryptocurrencies due to their increasing popularity.
However, Prospera operates under the Development and Employment Zone (ZEDE) designation, which grants it self-regulation faculties and the ability to make independent decisions. This has sparked criticism from some sectors of Honduran society, as they consider the existence of these zones a violation of the country's constitution and its sovereignty over the territories they occupy.
Conclusion
The adoption of bitcoin as a unit of account in Prospera is a significant development that could potentially revolutionize the city's economy. By embracing bitcoin, Prospera is taking a bold step towards creating a bitcoin circular economy and fostering financial freedom for its residents and businesses. Nevertheless, the challenges surrounding tax payments in bitcoin need to be addressed to fully realize the potential of this initiative.
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Frequently Asked Questions
Who is entitled to the gold in a IRA that holds gold?
The IRS considers gold owned by an individual to be “a type of money” and is subject taxation.
This tax-free status is only available to those who have owned at least $10,000 of gold and have kept it for at minimum five years.
Gold can be used to protect against inflation and price volatility. However, it is not a good idea to own gold if you don't intend to use it.
You will need to declare the value of gold if you intend on selling it one day. This could impact how capital gains taxes you owe for cash investments.
You should consult a financial planner or accountant to see what options are available to you.
Do you need to open a Precious Metal IRA
The most important thing you should know before opening an IRA account is that precious metals are not covered by insurance. It is impossible to get back money if you lose your investment. This includes investments that have been damaged by fire, flooding, theft, and so on.
You can protect yourself against such losses by purchasing physical gold and silver coins. These items are timeless and have a lifetime value. If you were to sell them today, you would likely receive more than what you paid for them when they were first minted.
Choose a reputable company with competitive rates and quality products if you are looking to open an IRA. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.
If you decide to open an account, remember that you won't see any returns until after you retire. Do not forget about the future!
What precious metals do you have that you can invest in for your retirement?
Silver and gold are two of the most valuable precious metals. Both are easy to sell and can be bought easily. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: The oldest form of currency known to man is gold. It is stable and very secure. Because of this, it is considered a great way of preserving wealth during times when there are uncertainties.
Silver: Silver has been a favorite among investors for years. It's a great option for those who want stability. Unlike gold, silver tends to go up instead of down.
Platinium is another precious metal that is becoming increasingly popular. It's durable and resists corrosion, just like gold and silver. It's however much more costly than any of its counterparts.
Rhodium: Rhodium is used in catalytic converters. It is also used for jewelry making. And, it's relatively cheap compared to other types of precious metals.
Palladium – Palladium is an alternative to platinum that's more common but less scarce. It's also much more affordable. It's a popular choice for investors who want to add precious metals into their portfolios.
What are some of the benefits of a gold IRA
The best way to save money for retirement is to place it in an Individual Retirement Account. It is tax-deferred until it's withdrawn. You are in complete control of how much you take out each fiscal year. There are many types of IRAs. Some are better suited for people who want to save for college expenses. Others are intended for investors seeking higher returns. Roth IRAs are a way for individuals to make contributions after the age of 59 1/2, and then pay taxes on any earnings upon retirement. These earnings don't get taxed if they withdraw funds. This type of account might be a good choice if your goal is to retire early.
Because it allows you money to be invested in multiple asset classes, a ‘gold IRA' is similar to any other IRAs. Unlike a regular IRA where you pay taxes on gains, a gold IRA doesn't require you to worry about taxation while you wait to get them. People who prefer to save their money and invest it instead of spending it are well-suited for gold IRAs.
An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. That means you won't have to think about making deposits every month. You could also set up direct debits to never miss a payment.
Gold is one of today's most safest investments. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even during economic turmoil, gold prices tend to stay relatively stable. This makes it a great investment option to protect your savings from inflation.
What is the Performance of Gold as an Investment?
The supply and demand for gold affect the price of gold. Interest rates are also a factor.
Due to the limited supply of gold, prices for gold are highly volatile. You must also store physical gold somewhere to avoid the risk of it becoming stale.
Statistics
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
irs.gov
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Lawful – WSJ
investopedia.com
bbb.org
How To
How to Keep Physical Gold in an IRA
The best way to invest in Gold is by purchasing shares of companies that produce it. However, this method comes with many risks because there's no guarantee that these companies will continue to survive. There is always the chance of them losing their money due to fluctuations of the gold price.
An alternative option would be to buy physical gold itself. This requires you to either open up your account at a bank or an online bullion dealer or simply purchase gold from a reputable seller. This option offers the advantages of being able to purchase gold at low prices and easy access (you don’t need to deal directly with stock exchanges). It's also easy to see how many gold you have. You'll get a receipt showing exactly what you paid, so you'll know if any taxes were missed. You are also less likely to be robbed than investing in stocks.
However, there are some disadvantages too. You won't get the bank's interest rates or investment money. You can't diversify your holdings, and you are stuck with the items you have bought. Finally, tax man may want to ask where you put your gold.
BullionVault.com offers more information on buying gold for an IRA.
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By: Sergio Goschenko
Title: Prospera Adopts Bitcoin as Unit of Account: Paving the Way for a Bitcoin Circular Economy
Sourced From: news.bitcoin.com/honduran-city-of-prospera-adopts-bitcoin-as-unit-of-account/
Published Date: Tue, 09 Jan 2024 14:30:46 +0000
