Trading with Crypto Exchanges and Crypto CFDs: Which is Better?

crypto cfd

CFD could be a very foreign word for a crypto trader, but for traditional market traders, it is one of the most useful assets to trade with on different markets. CFD is an abbreviation for Contracts for Difference, which are basically assets that help you “buy a price” and not the asset itself. It may sound a bit confusing, but it is still quite easy to understand once you know the basics.

The primary difference between actual cryptos and crypto CFDs is the ownership. Meaning that when you are trading on a crypto exchange, you are …

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The Moneyist: ‘I absolutely don’t want his two brats to inherit one penny from me’: I want to restrict how much money I leave my partner— and his children

Dear Quentin, My common-law husband has two children from a previous marriage. They are in their early 30s now. Neither of them is pleasant to be around, nor have they ever shown any consideration or respect for me. Honestly, I dislike them very much.

My partner is the executor of my will. I feel he has always had terribly poor judgment when it comes to financial matters. It is I who pays for most everything and have done very well. Our homes are in my name, since I paid for them, and I have a solid trading account. I would like to provide my partner with plenty to live on and permit him to remain in the house, but give all my money to the Sea Shepherd nonprofit and Justice for Animals. I absolutely don’t want his two brats to inherit one penny from me. My partner has managed to save a couple hundred thousand to pass on to them, enabled by me, which is more than generous. We already have a cohabitation agreement, which is recognized in our state. What advice can you give me? Wife and Reluctant StepmotherDear WRS, You have the right to leave your money to whomever you choose and, as I told this gentleman, alleviating the suffering of abused animals is always a good cause. It sounds like you are bound by a cohabitation agreement rather than a common-law marriage, which is only recognized in a handful of states. Let’s proceed on the basis that it’s the former rather than the latter. If your partner has proven himself to be imprudent or irresponsible with money in the past, and given the fact that he has two children whom you do not wish to receive any of your estate, I suggest appointing an independent executor of your estate — and/or should you decide to set up a trust to manage your funds after you’re gone, appoint a third party as the trustee.  Brian Tully, an attorney specializing in elder law and life care planning, agrees 100% that you need a trust and third party as successor trustee. “The revocable trust serves to avoid the expensive, lengthy and public-court proceeding called probate and allows for a seamless transition in authority should the wife lose capacity in the future,” he said. “Selecting the successor trustee will be key — it’s a business decision, not an emotional one, so select someone who is firm and financially savvy, as there may be a challenge or pressure by the undeserving children of your partner,” he adds. “If no one like that is close, then select a trusted attorney, CPA or financial institution.” Upon your passing, you can then — as you stated — provide your partner with the right to live in your home for his lifetime as long as he pays the expenses, Tully says. “Should he fail to pay the expenses or move out, the successor trustee can sell the property,” he says. When the home is sold or upon his death, those proceeds can also be distributed to your charities of choice. So far, so good. You know what you want, and you are making no apology for your decisions. It’s your money and your life. You are also being transparent about your wishes with your partner, and giving him a life estate to live in your home is thoughtful and generous. Believe me, not everyone has such forethought. In the meantime, I wish you many happy years ahead. You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter. Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns. The Moneyist regrets he cannot reply to questions individually. More from Quentin Fottrell: • ‘She took his queen-size bed for herself’: My sister mooched off my father while pretending to be his caregiver. Then he died a painful death.• My wife of 5 years will leave her house and life insurance to her kids. I help with property taxes and utilities. Do I have any rights?• ‘They’ve shown no remorse’: My relatives agreed to rent my apartment, but they never moved in. I was stuck paying the rent for 2 months

Tax Guy: I quit my job with company stock in my 401(k). Now what?

Have you joined the Great Resignation? Yes? If you quit your job with company stock in your 401(k) account, you might wonder if you have a tax-smart option for the stock. You probably do. Here’s what you need to know. Should you roll distributed company stock over into IRA or keep it in taxable account? Conventional wisdom dictates that you should roll over any distribution from a company qualified retirement plan account into an IRA. That avoids an immediate income tax hit and allows you to continue to benefit from tax-deferred earnings until you take withdrawals from the IRA. However, following conventional wisdom is not always wise.  

The tax consequences of keeping company stock in taxable account Contrary to conventional wisdom, when a qualified retirement plan account, such as your 401(k), holds appreciated employer stock, you may be better off tax-wise by withdrawing the shares, paying a hopefully modest tax hit, and then holding the shares in a taxable brokerage firm account — instead of rolling them over into an IRA. Everything else received in the lump-sum distribution can, and generally should, be rolled over tax-free into an IRA. As long as the distributed company shares are part of what qualifies as a lump-sum distribution (see the sidebar below for more details) from your qualified plan account(s), only the amount of the plan’s cost basis for the shares (generally FMV when the shares were acquired by the plan) is taxed currently.   If the shares have appreciated substantially while held in your retirement account, the cost basis could be a relatively small percentage of current value. That said, the cost basis will not necessarily be an insignificant amount. If you are under age 55 when you quit your job, the 10% early distribution penalty tax will also generally apply, but it will only apply to the hopefully relatively modest cost basis amount as opposed to the full fair market value of the distributed shares.   The cost basis amount will be taxed at your regular federal income tax rate, which can currently be as high as 37%. But here are the offsetting tax benefits. 1. The net unrealized appreciation (NUA) when the shares are distributed and then held in a taxable account qualifies for the lower federal income tax rates on long-term capital gains. The NUA is the difference between the FMV of the company shares on the distribution date and the plan’s cost basis for the shares. 2. Even better, the capital gains tax on the NUA is deferred until you actually sell the shares. The current maximum federal income tax rate on long-term capital gains is 20%, but most folks will pay “only” 15%. You may also owe the 3.8% federal net investment income tax (NIIT) and state income tax, depending on where you live.  3. Any post-distribution appreciation, after the shares are distributed from your qualified plan account, also qualifies for lower long-term capital gain tax rates if you hold the shares for more than 12 months. Your holding period is deemed to begin on the day after the shares are delivered by the plan to the transfer agent with instructions to reissue the shares in your name. As stated above, the current maximum federal income tax rate on long-term capital gains is 20%, but most folks will pay 15%. You may also owe the 3.8% federal net investment income tax (NIIT) and state income tax, depending on where you live. 4. If you die while still owning the company shares, current law gives your heirs a federal income tax basis step-up for any post-distribution appreciation. However, your heirs will owe federal income tax at long-term capital gains rates on the NUA when the shares are eventually sold. What are the tax consequences of rolling company stock into an IRA? If you follow conventional wisdom and roll your distributed company shares into an IRA, no income tax will be due until you withdraw money from the IRA. However, all the NUA and any later appreciation in the value of the company shares will eventually be taxed at higher ordinary income rates. Here’s an example You join the Great Resignation by quitting your job at age 40. Your company only offers a 401(k) plan. In a single transaction, you receive a lump-sum distribution from your 401(k) account that consists of $200,000 of cash and company stock with a current FMV of $100,000. The cost basis of the stock is $10,000. So, you have $90,000 of NUA ($100,000 − $10,000). If you roll the $200,000 of cash into an IRA and keep all the stock in a taxable brokerage firm account, you’ll only owe federal income tax on the $10,000 of stock basis. You’ll also owe the 10% early distribution penalty tax because you’re not age 50 or older.  If you’re in the 24% federal income tax bracket and don’t owe the 3.8% NIIT, the federal income tax hit is $3,400 [$10,000 x (24% + 10%)]. The advantages: (1) you can defer tax on the $90,000 of NUA until you actually sell the stock and pay lower long-term capital gains rates when you do and (2) you’ll pay lower long-term capital gains rates on any additional appreciation as long as you hold the stock in your taxable account for over one year.   Warning: If you don’t receive the company stock as part of a lump-sum distribution, and you keep the distributed shares in a taxable account (instead of rolling them over into an IRA), the current FMV of the shares will be generally be taxed at higher ordinary income rates. Any subsequent appreciation in the value of the shares will qualify for lower long-term capital gains tax rates if you hold the shares for over a year.  The bottom line The favorable federal income tax treatment illustrated in the preceding example only applies to company shares that you receive as part of a lump-sum distribution from a qualified employer retirement plan, such as a 401(k) plan. See the sidebar for what counts as a lump-sum distribution. The point is: you might get much better tax results over the long haul if you don’t roll over company shares received as part of a lump-sum distribution. If big bucks are in play, consult your tax adviser before deciding what to do.    Sidebar: What counts as a lump-sum distribution? Good question. A lump-sum distribution (LSD) is a distribution, or several distributions, that result in you, the employee, receiving your entire balance from a qualified pension plan, profit-sharing plan, or stock bonus plan (or several such plans) within a single calendar year. For purposes of this entire-balance requirement, the following aggregation rules apply: 1. All pension plans maintained by your employer are treated as a single pension plan. This includes target-benefit and money-purchase pension plans as well as defined-benefit pension plans. 2. All profit-sharing plans, which include 401(k) plans, maintained by your employer are treated as a single profit-sharing plan. 3. All stock-bonus plans maintained by your employer are treated as a single stock-bonus plan. Finally, for a distribution to be an LSD, it must be received due to your separation from service (leaving the company for any reason), attainment of age 59½, or death. If you’re 59½ or older, you can receive an LSD without separating from service if the plan(s) permit it.  To sum up: a distribution will qualify as an LSD if you receive in the same calendar year your entire balance from all plans of the same type in which you participate. Multiple payments are permitted as long as you receive them all in the same year. For example, if you receive your entire balance from all company profit-sharing plans in 2022, those payouts qualify as an LSD even if you don’t receive your entire balance from the company pension plan until 2023.  Key point: In the most common situation, where you only participate in a 401(k) plan and receive your entire account balance in one year, it’s an LSD.  

Futures Movers: Dow futures sink more than 400 points after Fed meeting

U.S. stock-index futures sank Wednesday night, as investors digested the possibility of multiple interest-rate hikes by the Fed this year, starting as soon as March. Dow Jones Industrial Average futures
YM00,
-1.23%
slid more than 400 points, while S&P 500 futures
ES00,
-1.41%
and Nasdaq-100 futures
NQ00,
-1.62%
tumbled.

During regular trading Wednesday, the Dow Jones Industrial Average
DJIA,
-0.38%
 fell 129.64 points, or 0.4%, to finish at 34,168.09, after earlier pushing as high as 34,815.67. The S&P 500 index
SPX,
-0.15%
 shed 6.52 points, or 0.2%, ending at 4,349.93, while the Nasdaq Composite Index
COMP,
+0.02%
 added 2.82 points, or less than 0.1%, to close at 13,542.12.  Trading was volatile again, and fell from session highs after Fed Chairman Jerome Powell signaled that changes are coming to U.S. monetary policy. While saying no final decisions have been made yet, Powell said the Fed “was of a mind” to raise the federal-funds rate at its mid-March meeting for the first time since 2018, and didn’t rule out the prospect of rate increases larger than 25 basis points given the scope of the inflation challenge. Economists interpreted his comments as opening the possibility of more than four rate hikes this year. After quarterly earnings reports from Tesla
TSLA,
+2.07%,
Intel
INTC,
+1.35%,
and AT&T
T,
-8.42%
on Wednesday, Apple
AAPL,
-0.06%,
Visa
V,
+1.92%,
Mastercard
MA,
+1.74%,
Deutsche Bank
DB,
+2.78%,
Comcast
CMCSA,
-2.44%,
Mondelez
MDLZ,
-0.54%
and others are scheduled to report Thursday.

Financial Crime: CEO of Miami armored-car company pleads guilty in $140 million ‘dirty gold’ smuggling scheme

The former chief executive of a Miami armored-car company has pleaded guilty to helping smuggle $140 million in “dirty gold” that had been illegally mined in South America into the United States. Jesus Gabriel Rodriguez, Jr. the one-time head of Transvalue, which provided transport services for precious metals and other valuables, admitted playing a pivotal role in an effort to smuggle gold into the country in a way that evaded anti-money rules and export bans.

Prosecutors say the 45-year-old Rodriguez and his company helped turn Miami into a major hub for enterprise that smuggled billions in gold into the U.S. from illegal mines all over South America, partly as a way to launder money for drug traffickers.  Illegal mining also often results in the destruction of wide swaths of rainforest and chemicals used in the process tend to leave the land barren for years after. Rodriguez’s attorney declined to comment.  According to court documents, Rodriguez conspired with employees at Texas-based NTR Metals, a large refiner of gold in the U.S., to obscure the origins of gold being brought in through Miami International Airport.Multi-entry travel The scheme, which operated between 2015 and 2016, involved thousands of kilograms of gold being flown into the U.S. from Curacao. As Curacao has no gold mines or processing facilities of its own, gold coming from there is considered to be mostly smuggled in by boat from Venezuela. In 2018 , then-President Trump signed an executive order prohibiting anyone in the U.S. from dealing with gold procured from Venezuelan mines. NTR also prohibited the purchase of gold from Curacao due to its own  anti-money laundering policies. To get around this, prosecutors say Rodriguez arranged for the gold brought in by couriers from Curacao to then be sent to the Cayman Islands, before being brought back to the U.S. 

“Complex money laundering schemes involve key players at every stage of the process.”

— Juan Antonio Gonzalez, the U.S. attorney for the southern district of Florida

Upon its return, Rodriguez was accused of arranging for customs documents to say the gold originated in the Cayman Islands.It would then be transported to NTR refineries in Florida and elsewhere and sold on to unwitting manufacturers of jewelry and other products that use gold. “Complex money laundering schemes involve key players at every stage of the process,” said Juan Antonio Gonzalez, the U.S. attorney for the southern district of Florida.  “Corporate executives who facilitate money laundering while purportedly importing lawful goods at the transport and U.S. Customs stages do not get to hide behind their status as otherwise legitimate business owners. Like everyone else participating in these illegal schemes, they will be prosecuted.” Three principal brokers at NTR pleaded guilty in 2017 to their roles in the scheme and have served time in prison. All three cooperated in the case against Rodriguez, court papers said. NTR paid a $15 million fine. Rodriguez faces up to 24 months in federal prison for submitting false customs documents, and has agreed to hand over $267,000 to authorities, prosecutors said. He is scheduled to be sentenced in April.