The US Internal Revenue Service (IRS) has come up with its first guidance on cryptocurrency tax. According to the IRS Cryptocurrency tax guidance, Bitcoin and other cryptocurrencies should be treated as property (just like gold, stocks, or real estates). Therefore, taxes owed on all cryptocurrency holdings should be calculated, and all losses/gains should be reported to the IRS well within the time limit. Non-compliance of this regulation by the investors and traders would be handled stringently by the US regulatory body. To ease the purpose of crypto tax reporting and data services, Lukka was founded in 2014 by Jake Benson in New York City, to deliver leading crypto products for the Crypto asset ecosystem. In this article, Lukka is discussed in detail.
Lukka is a blockchain technology and data service provider for middle and back-office digital asset processing. It was formerly known as Libra and has been rebranded as Lukka to expand its offerings. Lukka develops blockchain-based business solutions for trading firms, investment funds, exchanges, administrators, and accounting firms. Lukka’s key products are aimed towards automating and optimizing procedures for reconciliation, reporting, reconciliation, compliance, and controls.
Lukka’s products support the emerging cryptocurrency markets and are backed by institutional securities and protocols. Lukka promises to cater to the growing needs of providing audit-related services to the largest financial institutions all across the world. It acts as a bridge between the emerging crypto assets and the traditional financial ecosystems. It transforms decentralized data into some auditable information within a highly secure SOC 1 Type 2 infrastructure.
Special features of Lukka
Some of the exclusive features of Lukka are discussed in detail.
Highly secure and scalable
Lukka utilizes the highly secure SOC 1 Type 2 infrastructure, which ensures the security of a business’ data and connectivity. It also features Institutional-grade solutions supporting high volume usage without compromising the runtimes.
Lukka’s team consists of experts from the field of digital designing and finance with years of skillful experience in trading, risk management, and audit services. This means that Lukka’s products are more advanced and designed according to the business requirements.
Lukka provides business solutions with accurate transaction data. It helps in creating accurate financial, regulatory, operational, performance, and business intelligence reports. The standardized data directory of Lukka provides daily updates on various crypto assets and across the varied cryptocurrency exchanges.
How Lukka is pushing crypto tax reporting and data services
By announcing the “do-it-yourself” crypto tax products aimed for retail investors, cryptocurrency accounting firm Lukka has been revolutionizing the Crypto Tax Reporting and Data Services. Primarily aimed for enterprises and fund administrators, Lukka has now expanded its offerings for the benefits of retail investors as well. The retail investors from now onwards will be required to report their transactions with cryptocurrencies to the IRS.
The CEO of Lukka commented on this recent expansion of Lukka,
This year we are focused on the retail investor because, for the first time in six years, the IRS has clarified for taxpayers how they want to treat cryptocurrency. There is a new question that appears first on the IRS schedule 1 tax form that asks, do you have any transactions in virtual currencies for this year? Six years ago, taxpayers had to report gains and losses for any asset, but this has largely been avoided, as it was never explicitly stated. This year, the question is specifically mentioned first on a major tax form.
He added that 2019 would be the first year since the IRS has been taking steps to remind the taxpayers to document their cryptocurrency activities explicitly. In fact, Lukka happens to be the very first data services provider to receive both the SOC 1 Type 2 or the Service Organization Control and SOC 2 Type 2 attestation reports. Lukka’s SOC reports were delivered in January 2020 for which the cover testing periods were in 2019.
Therefore, Lukka aims at revolutionizing the auditing, collection, and transformation of cryptocurrency-based financial data. With this transformation, Lukka looks forward to help the business houses improve their operations, thereby ensuring the regulatory compliances and transparency and also effectively create financial statements.