Australian Dollar Withdrawal Requests
A recent ruling by the Victorian Supreme Court in January has significantly increased the chances of Australian creditors of the crypto exchange FTX recovering their funds. Judge Patricia Matthews clarified that only those who initiated Australian dollar withdrawal requests, totaling around 747 investors, will be eligible for full reimbursement.
According to the Australian Financial Review, the advisory and investment firm Korda Mentha has collected $26 million, which is enough to repay all 747 investors. This news comes following reports that FTX has prioritized repaying its creditors rather than reviving its platform.
However, the Supreme Court judge ruled that Australian investors who made crypto-to-crypto withdrawal requests will have to wait until the completion of the bankruptcy proceedings in the U.S. Despite this setback, FTX lawyer Andrew Dietderich remains optimistic that all creditors will eventually be fully reimbursed.
Dietderich reportedly told a U.S. judge, "There is still a great amount of work, and risk, between us and that result. But we believe the objective is within reach, and we have a strategy to achieve it."
In addition, the FTX creditor committee lawyer, Kris Hansen, emphasized that all reimbursements will be calculated based on the prices prevailing at the time of the bankruptcy filing. This means that the significant increase in the value of cryptocurrencies like bitcoin (BTC) and Solana (SOL), which have surged by over 600% since November 2022, will not directly result in higher payouts for creditors.
While some creditors may be frustrated by this decision, a U.S. judge has ruled that FTX's reimbursement proposal is in line with legal standards and is legitimate.
What are your thoughts on this story? Let us know in the comments section below.
Frequently Asked Questions
How much of your portfolio should you hold in precious metals
To answer this question, we must first understand what precious metals are. Precious elements are those elements which have a high price relative to other commodities. This makes them highly valuable for both investment and trading. Gold is currently the most widely traded precious metal.
There are also many other precious metals such as platinum and silver. The price of gold tends to fluctuate but generally stays at a reasonably stable level during periods of economic turmoil. It also remains relatively unaffected by inflation and deflation.
All precious metals prices tend to rise with the overall market. However, the prices of precious metals do not always move in sync with one another. For example, when the economy is doing poorly, the price of gold typically rises while the prices of other precious metals tend to fall. Investors are more likely to expect lower interest rates making bonds less attractive investments.
The opposite effect happens when the economy is strong. Investors prefer safe assets such as Treasury Bonds and demand fewer precious metals. They are more rare, so they become more expensive and less valuable.
Diversifying across precious metals is a great way to maximize your investment returns. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
Who holds the gold in a gold IRA?
The IRS considers an individual who owns gold as holding “a form of money” subject to taxation.
To be eligible for the tax-free status, you must possess at least $10,000 gold and have had it stored for at least five consecutive years.
Owning gold can also help protect against inflation and price volatility, but it doesn't make sense to hold gold if you're not going to use it.
If you plan to eventually sell the gold, you'll need a report on its value. This could impact the amount of capital gains taxes your owe if you cash in your investments.
It is a good idea to consult an accountant or financial planner to learn more about your options.
How to Open a Precious Metal IRA?
First, decide if an Individual Retirement Account is right for you. You must complete Form 8606 to open an account. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. This form should be filled within 60 calendar days of opening the account. Once this has been completed, you can begin investing. You may also choose to contribute directly from your paycheck using payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. Otherwise, it will be the same process as an ordinary IRA.
To be eligible for a precious metals IRA, you will need to meet certain requirements. The IRS stipulates that you must have earned income and be at least 18-years old. Your earnings cannot exceed $110,000 per year ($220,000 if married and filing jointly) for any single tax year. And, you have to make contributions regularly. These rules apply to contributions made directly or through employer sponsorship.
You can use a precious metals IRA to invest in gold, silver, palladium, platinum, rhodium, or even platinum. You can only purchase bullion in physical form. This means you won't be allowed to trade shares of stock or bonds.
To invest directly in precious metals companies, you can also use precious metals IRA. This option may be offered by some IRA providers.
There are two main drawbacks to investing through an IRA in precious metallics. First, they're not as liquid as stocks or bonds. It's also more difficult to sell them when they are needed. They also don't pay dividends, like stocks and bonds. Therefore, you will lose money over time and not gain it.
Which precious metal is best to invest in?
This depends on what risk you are willing take and what kind of return you desire. Although gold has been considered a safe investment, it is not always the most lucrative. For example, if your goal is to make quick money, gold may not suit you. If you have time and patience, you should consider investing in silver instead.
If you don’t desire to become rich quickly, gold may be your best option. If you want to invest in long-term, steady returns, silver is a better choice.
How can I withdraw from a Precious metal IRA?
First, decide if it is possible to withdraw funds from an IRA. Next, ensure you have enough cash on hand to pay any penalties or fees that could be associated with withdrawing funds.
A taxable brokerage account is a better option than an IRA if you are prepared to pay a penalty for early withdrawals. You will also have to account for taxes due on any amount you withdraw if you choose this option.
Next, calculate how much money your IRA will allow you to withdraw. This calculation is affected by many factors, such as the age at which you withdraw the money, the amount of time the account has been owned, and whether your plans to continue contributing to your retirement fund.
Once you have determined the percentage of your total savings that you would like to convert to cash, you can then decide which type of IRA to use. While traditional IRAs are tax-free, Roth IRAs can be withdrawn at any time after you reach 59 1/2. However, Roth IRAs will charge income taxes upfront and allow you to access your earnings later without additional taxes.
After these calculations have been completed, you will need to open a brokerage bank account. Most brokers offer free signup bonuses and other promotions to entice people to open accounts. However, a debit card is better than a card. This will save you unnecessary fees.
When you finally get around to making withdrawals from your precious metal IRA, you'll need a safe place where you can store your coins. Some storage areas will accept bullion, while others require you to purchase individual coins. Either way, you'll need to weigh the pros and cons of each before choosing one.
Bullion bars, for example, require less space as you're not dealing with individual coins. But, each coin must be counted separately. You can track their value by keeping individual coins.
Some people prefer to keep coins safe in a vault. Others prefer to store them in a safe deposit box. You can still enjoy the benefits of bullion for many years, regardless of which method you choose.
How much should I contribute to my Roth IRA account?
Roth IRAs allow you to deposit your money tax-free. These accounts are not allowed to be withdrawn before the age of 59 1/2. There are some rules that you need to keep in mind if you want to withdraw funds from these accounts before you reach 59 1/2. First, your principal (the original deposit amount) cannot be touched. You cannot withdraw more than the original amount you contributed. If you take out more than the initial contribution, you must pay tax.
The second rule is that you cannot withdraw your earnings without paying income taxes. When you withdraw, you will have to pay income tax. For example, let's say that you contribute $5,000 to your Roth IRA every year. In addition, let's assume you earn $10,000 per year after contributing. The federal income tax on your earnings would amount to $3,500. The remaining $6,500 is yours. Since you're limited to taking out only what you initially contributed, that's all you could take out.
If you took $4,000 from your earnings, you would still owe taxes for the $1,500 remaining. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.
There are two types if Roth IRAs: Roth and Traditional. Traditional IRAs allow pre-tax contributions to be deducted from your taxable tax income. You can withdraw your contributions plus interest from your traditional IRA when you retire. A traditional IRA can be withdrawn up to the maximum amount allowed.
A Roth IRA doesn't allow you to deduct your contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. Unlike a traditional IRA, there is no minimum withdrawal requirement. You don’t have to wait for your turn 70 1/2 years before you can withdraw your contributions.
Statistics
- 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)
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
cftc.gov
law.cornell.edu
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement accounts
forbes.com
irs.gov
How To
How to hold physical gold in an IRA
The easiest way to invest is to buy shares in companies that make gold. But, this approach comes with risks. These companies may not survive the next few years. Even if they survive, there's always the risk that they will lose money due fluctuations in gold prices.
Alternative options include buying physical gold. 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. These options offer the convenience of easy access, as you don't need stock exchanges to do so. You can also make purchases at lower prices. It's easier to track how much gold is in your possession. So you can see exactly what you have paid and if you missed any taxes, you will get a receipt. You're also less susceptible to theft than investing with stocks.
There are also some drawbacks. Bank interest rates and investment funds won't help you. You won't have the ability to diversify your holdings; you will be stuck with what you purchased. Finally, the taxman might want to know where your gold has been placed!
If you'd like to learn more about buying gold in an IRA, visit the website of BullionVault.com today!
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By: Terence Zimwara
Title: Australian Creditors of FTX Crypto Exchange Could Recover All Their Money: Judge's Ruling
Sourced From: news.bitcoin.com/supreme-court-ruling-bolsters-australian-ftx-creditors-prospects-for-full-recovery/
Published Date: Fri, 02 Feb 2024 21:30:13 +0000
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