The big four accounting firm has announced the acquisition of tech assets and patents from a little known San Francisco based startup called Elevated Consciousness, Inc. EY says:
“The Andy Crypto-Asset Accounting and Tax (“CAAT”) tool methodically connects with multiple cryptocurrency exchanges and wallets, allowing for better visibility into cryptocurrency transactions and inventory.”
The tool was developed by CEO, VJ Anma, based on his experience of running a crypto fund, the accounting firm says, with this move aimed at serving better accounting services to cryptonians or crypto companies.
“We continue to see an increase in consensus among the asset management community that crypto-assets are a viable asset class from an investment standpoint,” said Michael Meisler, Ernst & Young LLP Tax partner and Tax Blockchain leader, before further adding:
“The uncertainty in applying existing guidance related to the timing, character and source of income generated in connection with trading and investing in crypto-assets requires the use of flexible solutions.
By allowing taxpayers to model different potential outcomes, they are better able to assess their risk related to reporting taxable income for this new asset class.
Technologies such as CAAT can help EY member firms and their clients effectively navigate this analysis. CAAT will allow us to help clients investing in crypto-assets, both in the fund space and beyond.”
Taxes can be very complicated around cryptocurrencies especially in America where IRS has designated cryptos as commodities, with some suggesting that leads to double taxation when they are used as currencies.
Different jurisdictions, however, take different approaches. UK, for example, taxes them as currencies when used as currencies, and as commodities when used mainly as an investment, while Germany doesn’t have much taxes if the crypto is held for a year.
EY is clearly seeing a business opportunity here to assist individuals or companies in navigating the crypto taxes maze, with Paul Brody, at EY Global Innovation, stating:
“This acquisition is another element in building out a portfolio of blockchain and cryptocurrency solutions across our businesses.”