Auto converting cryptocurrencies through exchanges allows you to receive bitcoins/altcoins and execute instant sells in the background. The sell will credit funds to your local currency wallet. This is a great tool for people who want to accept bitcoin/altcoins but prefer to cash out immediately to their local currency to avoid volatility. In addition, some countries consider cryptocurrency to be property and the gains or losses in value while holding the coins may be subject to capital gains tax. When merchants instantly convert incoming cryptocurrency payments into local currencies (euros, dollars) it means they do not hold the coins for any period of time and should not be subject to any capital gains taxes.
Steps to setup:
- You will need to create an account on any crypto trading platforms (Bitstamp.net or Poloniex.com or Bitfinex.com, etc.)
- Setup so that all your received crypto payments are sent directly to your account on Bitstamp/Poloniex/Bitfinex/etc. You can do this by entering your Bitstamp/Poloniex/Bitfinex/etc. wallet addresses in your MyCryptoCheckout wallet settings. And then use the “autosell” feature (auto trade your crypto coins to USD) on Bitstamp/Poloniex/Bitfinex/etc.
- Using that functionality, you don’t need to worry if cryptocurrency prices go down or up. Within 1-2 hours after a crypto coin payment has been received by you, your payment will be automatically converted to USD on Bitstamp/Poloniex/Bitfinex/etc and will be kept on your Bitstamp/Poloniex/Bitfinex/etc USD account.
- Later you can withdraw your USD from Bitstamp/Poloniex/Bitfinex/etc. to your own USA/UK/France/etc. bank account
(Remember you should consult a tax professional regarding any tax filing needs. This post is an overview of tools you can utilize to potentially make reporting easier – this is not tax guidance.)