It is not new that it’s a pretty universal rule that if you receive money, the IRS wants to know about it. So, it is not surprising that in recent years the agency has asked about cryptocurrency on the 1040 for individual taxpayers. It is a little newer, however, that cryptocurrency has really taken off, so now the IRS is asking about it on forms for estates, trusts, partnerships, and C and S corporations.

With this expanded range of questions, it is probably worth bringing a little more attention to what the IRS really wants to know when asking this question. As this issue has come up, many taxpayers have thought that they had nothing to report. Sure, they did dabble some in this realm, but some just made a purchase once (possibly even many years ago) and traded it through an exchange into a new form of cryptocurrency. And in this type of transaction, it’s easy to think there is nothing to report for they never actually saw any money come back to them because of it. This is something that still needs to be shown, however.

Overall, if a taxpayer did any of the following activities, they will need to report it to the IRS:

• Received digital assets as payment for property or services provided
• Received digital assets resulting from a reward or award
• Received new digital assets resulting from mining, staking and similar activities
• Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two)
• Disposed of digital assets in exchange for property or services
• Disposed of a digital asset in exchange or trade for another digital asset
• Sold a digital asset
• Otherwise disposed of any other financial interest in a digital asset

If this is something you are only doing in a small way, it is easy to overlook it when it comes to tax planning. In fact, it is possible that the outcome on your tax return will be very minimal. At the same time, however, you do not want to give the IRS any reason to have your tax return stand out to them. So, make gathering any information about your crypto holdings part of your standard tax preparation. And do it soon while there is enough time to do it before the weight of deadlines starts to feel heavy.

Warmly,

Josh Bousquet
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Subscription services certainly are not new. The business plan for gyms has long involved a number of people paying a monthly fee for a service they never use. With the proliferation of online services in recent history, though, the comfort people have in signing up for an ongoing relationship has increased. Heck, you may have signed up for a streaming service for the first time during the pandemic lockdown that you are still paying for every month. And now, this pricing mindset is becoming a hot thing to think about across different types of businesses.

And it doesn’t even really have to be a subscription in the strictest terms for companies to embrace it. This week, Applebee’s offered a pass for $200 that would cover a year of weekly date nights (52 uses). The pass includes up to $30 of food and non-alcoholic beverages per use. And really, any way you break down the numbers, it is a very good deal for those who purchased it. And many agreed, as the passes sold out in a minute.

What does Applebee’s stand to gain from this, though? Well first, I am clearly talking about them, so it gets them some immediate word-of-mouth advertising. Also, since the deal does not include alcohol, if a couple goes out and gets a couple drinks each, the company’s profit starts to rise again. And what if this couple brings along their children or another couple? What this also does is establish a habit. If you can get people to visit your establishment weekly for a year, chances are they will do so more frequently than they had before even after the deal runs its course.

Beyond that, though, from a psychological point of view, it strikes me that the company is tapping into something that people are just now more comfortable with, the concept of having a subscription. After all, in many stories this was described as a subscription, but it really isn’t. Anything that you pay for once does not fit that model of repeated payments at regular intervals.

I also recently have written multiple times about the idea of not being afraid to try something new. This can be scary in one’s business because you can never know the outcome, but you can always pull back if things don’t work. Sometimes they do, though, passes sell out in a minute, and then a company gets to see how it plays out. Seems worth a shot anyway.

Warmly,

Josh Bousquet
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Early in the year, you hear a lot of talk about the changes people are hoping to make. Heck, I have even been guilty of it in this space. But it seems some out there are even really doing something about it.

Recently, it came out that Costco is making moves to crack down on people shopping at their stores by using other people’s memberships. Previously, the stores were requiring shoppers to show their membership card along with a photo ID even when using self-checkouts. Now, however, the store is starting to test scanning membership cards as soon as one enters the store.

I am not going to claim any expertise in the day-to-day workings of a retail store. My knowledge extends no further than being a customer. From a business perspective, however, a company that is based on a subscription model seems to deserve to have those benefiting from their services to be actual members.

Along the same lines, I am sure many of you have also heard about streaming services like Netflix speaking of ways to crack down on membership sharing. Granted, this involves more work when a service can be reached with just a username and password, but the point is the same – only people who have paid for a service should get to use it.

If Costco and streaming services can really bottle this up and curtail membership sharing will take time to determine. What’s more important for now is that they are doing something.

And the Costco moves aren’t even anything extravagant. It’s not as if they haven’t scanned membership cards in the past. It’s not as if members aren’t given rules concerning their membership. The company is just taking small steps to enforce what already exists. And sure, this is all happening around memberships that only cost $60/year. But when you start to talk about potentially pushing thousands of people to get their own memberships, it starts to add up.

So again, in this time of year when so many are talking about accomplishing so much, the point isn’t always about getting to the finish line, but just doing something. For just by doing something, you are bound to get closer to that endpoint. Making moves gets you to where you want to be, even when it’s the first in a series of moves. So even if what you want in the end seems far away, the first simple steps are still worth taking.

Warmly,

Josh Bousquet
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Now that we are into the new year, it’s impossible to not hear about resolutions and what people are hoping to accomplish now that the calendar has turned. I could spend a lot of time here discussing what the chances are for success, but why start from a critical perspective? You want to do something better, great!

What I will say, though, is that the best way to handle such things is by not expecting some magic switch that can turn something that was a stress point (otherwise why it would need to change?) and make it suddenly better all the time and ensure it will never again be an issue. If that was the case, then it wouldn’t require something like a resolution to enact the change.

In there lies the reason why resolutions can feel so difficult. We know where we want to go. We appreciate how things will be so much better if we get there, but when the journey starts to feel long, it can begin to feel like it is not worth it.

If it wasn’t worth it, though, you wouldn’t have wanted it at the start.

One of the keys to keep moving through those low points is to not be afraid to give yourself credit along the way. For yes, the path takes a long time to travel, but that doesn’t mean you aren’t making progress as you go. Even if you are not at the finish line, and even if it feels really far away, you are still doing better than you were previously and that is worth celebrating.

So if it’s possible, you should set some benchmarks along the way. That way, once you do get there, you will have something to celebrate and can feel proud of what you have accomplished.  And then imagine, it will only take one more small step to get beyond that point.

Look how well you are doing!

Along with that, it can also help to not go about accomplishing such things alone.  If you have a friend who can be your cheerleader along the way, take advantage of that. And if you are doing something where there are professionals who can help you accomplish your goals, don’t shy from that help either. To that end, if there is anything we can do to help you get to where you want to be, don’t hesitate to reach out.

​Happy New Year!

Warmly,

Josh Bousquet
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