06 Jan Bitcoin And Real Estate
Bitcoin And Real Estate
Bitcoin and real estate, has anyone actually bought or sold their home with bitcoin? The answer is YES! Bitcoin is already accepted in many retail outlets and restaurants, so it’s no surprise that this has extended to real estate as well. According to an article at CNBC, “it was only a matter of time before the cryptocurrency took on real estate. That time is now. Bitcoin is slowly making its way into closings on everything from Lake Tahoe land in California to Manhattan condos to single-family homes in the heart of Texas.” Ben Shaoul, president of Magnum Real Estate Group, is a developer working on a project in Manhattan’s lower east side. The project offers condos priced between 700k and 1.5 Million U.S. Shaoul is accepting bitcoin as a possilbe mode of payment and may even consider keeping the bitcoin rather than cashing it….He sees the flexibility of his project to be able to accept payment in bitcoin, as a competitive advantage in his marketplace.
The first ever single-family home sale in Texas involving bitcoin was announced last month. The buyer, being comfortable in tech, purchased the home with bitcoin. The seller preferring payment in conventional dollars, wanted the bitcoin to be converted. BitPay, a global bitcoin payment service provider out of Atlanta converted the bitcoins into dollars for the buyer. Given that bitcoin’s value is a moving target day to day, the risk was all on the buyer side. The seller agreed to a fixed price in dollars.
There is still nervousness and confusion about how bitcoins are taxed. Some guidance was issued by the Internal Revenue Agency in 2014, “What they said in that guidance is if you hold bitcoin or ethereum or one of these other convertible digital currencies as a capital asset, when you use that bitcoin to purchase goods or services — so for example, if I were to take $1 million in bitcoin to buy an apartment building or something — to the extent that bitcoin has appreciated since I acquired it, any of that gain, that built-in gain, would be taxed when I used the bitcoin to buy the building,” said Jeremy Naylor, a tax attorney and partner at the firm Cooley.” “It would be similar to selling stock to generate the cash to buy an apartment. In a direct transaction, buyers simply skip the part where they convert the bitcoin into dollars. Using BitPay, the buyers are ‘selling’ the bitcoin, and therefore any appreciation is taxable.”
One of the first deals in the U.S. involved a $1.6 million sale of land — a home site — in Lake Tahoe in 2014 and all of the deals so far have been done without a mortgage. Bitcoin and payments with bitcoin have been around for years, but yet it’s adoption into the real estate market has been slow to take hold. British entrepreneurs Michelle Mone and Doug Barrowman launched a bitcoin-priced real estate development in Dubai, and websites are starting to dot the landscape with listings priced in both conventional $$dollars and bitcoin $$dollars. In any case, this is a movement that will only grow with time as the millennials increasing get more invested in the real estate market and the price of bitcoin continues to grow in value.
Read the full CNBC Article:
Michael Nagle | Bloomberg | Getty Images Others, however, are not as comfortable with the relatively new currency. The first ever single-family home sale in Texas involving bitcoin was announced last month. The buyer, who works in the tech industry, purchased the newly built home in Austin using bitcoin, but the seller, a custom homebuilder, wanted the currency converted to dollars during the transaction.
On the Montreal front, accounting firm, Raymond Chabot Grant Thornton announced on Wednesday that it has made a multi-million-dollar investment in a new consulting firm, Catallaxy, which aims to help companies navigate the bitcoin technology. Francis Pouliot, one of the founders of Catallaxy, has been a driving force behind Bitcoin’s use in Montreal. He helped start the Bitcoin Embassy as a hub for advocates of the cryptocurrency. Bitcoin Embassy which started in September of 2013, recently closed earlier this year, Catallaxy plans to open its own community space as a sort of successor project, one with the added credibility that comes with a major partner.
“Pouliot compared blockchain to artificial intelligence – a technology area where Montreal is rapidly becoming a leader.”
To understand more about bitcoin and blockchain technologies, watch these videos;
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A block chain is a transaction database shared by all nodes participating in a system based on the Bitcoin protocol. A full copy of a currency’s block chain contains every transaction ever executed in the currency. With this information, one can find out how much value belonged to each address at any point in history.
What is the blockchain? If you don’t know, you should; if you do, chances are you still need some clarification on how it actually works. Don Tapscott is here to help, demystifying this world-changing, trust-building technology which, he says, represents nothing less than the second generation of the internet and holds the potential to transform money, business, government and society.