Collecting Big Data Footprints

May 23rd, 2016 | Posted by Sarah Jones in Guest Blogs | Member Blog Posts - (Comments Off)

This week on NVTC’s blog, the Virginia Commonwealth University School of Engineering shares research on Big Data footprints that the Electrical and Computer Engineering Department is working on with the Huazhong University of Science and Technology.


vcublogXubin He, Ph.D., professor and graduate program director of the Virginia Commonwealth University School of Engineering Electrical and Computer Engineering department, is working with Huazhong University of Science and Technology (HUST) to establish an international research institute focused on creating design techniques to improve data reliability and performance. Coordination efforts are currently underway to create rotation periods for students from VCU and HUST to conduct research within each university’s state-of-the art laboratories.

“This next step in our partnership with VCU helps both universities attract more high-quality research students, while enhancing the breadth and depth of our research,” said Dan Feng, Ph.D. and dean of the School of Computer Science and Technology at HUST. Feng also serves as director of the Data Storage and Application lab at HUST.

Managing big data

Data storage is a booming industry, with lots of opportunities. Just a decade ago, computational speed dominated research efforts and water cooler conversations. According to He, data is more important now. “Data empowers decision-making and drives business progress. No one can tolerate data loss, whether that data represents favorite photos or industry trends and analytics,” added He. And yet, trying to increase data capacity or replace obsolete data systems can shut down vital data centers for days.

Research teams from both universities find creative solutions to global data pain points. For example, these collaborative research teams reduced overhead costs associated with data failures by up to 30 percent. Their algorithms allow businesses to encode data that can be easily retrieved, instead of having to rely on costly data copies or redundant data centers.

Currently, in addition to HUST, He’s team also works with top data storage companies such as EMC, which ranks 128 in the Fortune 500 and had reported revenues of $24.4 billion in 2014.

The network effect

He has a simple philosophy to gauge the success of university research efforts — he looks at who else is there. “At top data storage and systems events such as USENIX’s File and Storage Technologies conference and USENIX’s Annual Technical conference, we’re presenting with peers from Harvard, MIT, Princeton and other premier universities we admire,” said He. These conferences typically accept about 30 presentation papers — that’s less than 20 percent of the global submissions they receive.

“Professor He’s leadership represents one of many efforts to build our international reputation in industry and academia,” said Erdem Topsakal, Ph.D. and chair of the Department of Electrical and Computer Engineering. “HUST is ranked 19 on the U.S. News World & Report’s Best Global Universities for Engineering list. When leading universities like HUST want to work closely with you, you know you’re doing something right.”

For more news from the Virginia Commonwealth University School of Engineering, click here.

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Bitcoin: What are the U.S. Tax Implications?

May 26th, 2015 | Posted by Sarah Jones in Guest Blogs - (Comments Off)

Although many critics are already considering Bitcoin irrelevant or even dead, technology behind Bitcoin is here to stay. This week on NVTC’s blog, John Calanog of member company CohnReznick LLP discusses the basic U.S. tax implications of using the Bitcoin currency.


In my first blog on the subject, I described Bitcoin and its increasing popularity as an alternative currency.  As the digital currency is becoming more and more prevalent in the marketplace, and for those already exchanging Bitcoins, the following article discusses the basic U.S. tax implications of using the currency. Although there may also be Foreign Bank and Financial Accounts (“FBAR”) and Foreign Account Tax Compliance Act (“FATCA”) compliance requirements, that is not covered in this blog.

What is the U.S. Taxation?

On March 25, 2014, the IRS released guidance in Notice 2014-21 explaining that Bitcoin would be treated as “property” and not as “currency” for federal income tax purposes.  From a practical standpoint, this means that gains and losses on the disposition of Bitcoin will not be treated as “exchange gain or loss” and will not be ordinary in character.  This is bad news for investors who hold depreciated Bitcoin and were hoping to take exchange losses as ordinary losses. However, it is good news for investors who hold appreciated Bitcoin and prefer capital gains treatment.

For those holding Bitcoin for sale in a trade or business (i.e., for “miners”  [1] and “dealers”), income resulting from the sale of such Bitcoin may be taxed as ordinary income.  However, for most investors who merely “trade” in Bitcoin, gains or losses will likely be capital and not ordinary.

From a tax compliance standpoint, the taxpayer has the burden of keeping a record of their tax basis in the Bitcoin and determining the fair market value of the Bitcoin at the time they seek to sell or otherwise dispose of it.  Fortunately, most exchanges and e-wallets have been implementing tools that enable customers to receive the needed documentation.  Still, users without any obtainable records should seek professional tax advice as they are likely going to need to estimate their tax liability from the records they do have on file.

Virtual Currency as Net Earnings from Self-Employment

A taxpayer who receives virtual currency, such as Bitcoin, as payment for services has gross income equal to the fair market value (“FMV”) of the currency, in U.S. dollars, as of the date of receipt.

Moreover, an independent contractor who receives virtual currency for performing services has self-employment income.  The amount of the income is the FMV of the currency, in U.S. dollars, as of the date of receipt.

If a taxpayer’s “mining” of virtual currency is a trade or business and is not undertaken as an employee, the net earnings from self-employment from that activity is treated as self-employment income.

Additional Tax Considerations

There may also be filing FinCEN Form 114, Report of Foreign Bank and Financial Accounts, (FBAR) or Foreign Account Tax Compliance Act (FATCA) reporting requirements.  However, that is beyond the scope of this blog.

Conclusion

Bitcoin has only been around for six years (since 2009) and many critics are already considering it irrelevant or even dead.  However, such pessimism is missing the point.  The technology behind Bitcoin is here to stay.  And that technology is likely to become more significant as developers create new and improved versions.

With the IRS issuing a Notice to give guidance for the tax treatment of this means of exchange suggests that Bitcoin is a real and lasting phenomenon. Technology companies and others using the Internet will need to deal with it in the future.  Our monetary system was not originally designed for the internet or for globalized trading.  This is where Bitcoin comes in – as a truly globalized currency.

_________________________________________________________________________________

The content of this article is intended to provide a general commentary on the subject.  Please seek the advice of a tax professional regarding your specific circumstances.

John Calanog, CPA, is a Tax Manager with CohnReznick LLP and is a member of the Firm’s Technology Industry Practice.  John’s experiences over the last fifteen years include U.S. tax compliance and consulting for C Corporations, S Corporations, Partnerships, and high net worth individuals who operate businesses in a wide variety of industries and taxing jurisdictions.  Contact John at john.calanog@cohnreznick.com. Follow CohnReznick’s Technology Practice on Twitter via @CR_TechInd


[1]Mining is the verification process of running mathematical operations on digital data in order to validate transactions and provide the requisite security for the public ledger of the Bitcoin network. The speed at which you mine is measured in hashes per second.

The Bitcoin network compensates “miners” for their effort by releasing Bitcoin to those who contribute the needed computational power. This comes in the form of both newly issued coin and from the transaction fees included in the transactions they validate when mining. The more computing power that is contributed, the greater their share of the reward.

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NVTC is inviting members and industry leaders to serve as guest bloggers, sharing insights and information on trends or business issues relevant to other members. This week, the NVTC Digital Strategy Committee writes about the group’s recent event on digital strategy and public safety, featuring Fairfax City Fire Department Chief Richard R. Bowers, and how it revealed several very interesting and useful challenges for the NOVA business community.


The Northern Virginia Technology Council’s (NVTC) Digital Strategy Committee (#nvtcdigstrat) recent event regarding Digital Strategy and Public Safety, featuring Richard R. Bowers – Chief, Fairfax Fire Department – revealed several very interesting and useful challenges for the NOVA business community.Not least of which was the current challenges around focused, resourced digital strategy planning across the County constituent agencies, and among local jurisdictions.Many targeted capabilities and improvements in “front-end” digital tools, outreach and engagement, plus initiatives on the “back-end” to handle system-specific data and information management are certainly underway, but information-sharing among the public safety stakeholders – businesses, government and the public – remains a strategic planning, governance and education hurdle to address. In other words, a B2G2C digital strategy challenge.NVTC Digital Strategy with Fairfax Fire Chief Richard Bowers

“Simplicity” was a key concept – that seems hard to maintain in the first responder settings, particularly with the profusion of both new technology equipment and situational data. Chief Bowers illustrated the challenge with local EMS responders – on route or on scene -having to quickly use and interact with at least 5 separate kinds of equipment:

  • EPCR (Electronic Patient Care Reporting)
  • CAD (Computer Aided Dispatch)
  • MDC (Mobile Data Computers)
  • NCR (National Capital Region) Patient Tracking System
  • Mobile Phones, iPads and Radios

The variety of interfaces, variety of data granulation, variety of authentication methods – it all adds up to what can be a burdensome expectation on responders, which creates higher risk in areas of data quality and security, process coordination and mission efficiency. This hinders, therefore, the ability of the entire responder community to deliver optimal outcomes – in spite of the number and types of technologies available and in use.

Furthermore, as the technologies available to both the responders and the public become more pervasive, easy to operate and use – for collecting or contributing incident reporting, sensory feedback and overall situational awareness data – it’s simply too difficult to add these inputs to the mix in a way that avoids information overload, or worse, information degradation or errors. There’s no common information architecture that anticipates a proliferation of device inputs, mobile and social channels.

A standard “dashboard” visualization service for use in the field, to quickly access the various systems and growing information sources, was also mentioned as a highly-desirable capability – particularly a dashboard to sensitive systems and protected information in a BYOD environment – i.e. on personal cellphones or tablets. A related need surfaced above the actual dashboard of the response vehicles and fire engines – actually having “heads up” display on the windshield of incident information, particularly GPS and route data.

Fairfax 2015 Police and Fire Games

The Committee was also briefed on the upcoming World Police and Fire Games, coming to Fairfax County at the end of June this year (2015). It’s anticipated that over 12,000 athletes and family/guests (over 30,000 in all) will attend the games, and that Fairfax County will experience tremendous global attention, regional pride and local economic benefit from hosting the event. Over 2000 volunteer slots remain open, along with many sponsorship opportunities for businesses, organizations or individuals. The Fairfax 2015 Games Website maintains all information for athletes and all other participants, from local accommodations and event venues, to a robust social community and online marketplace.

The NVTC Digital Strategy Committee looks forward to more collaboration sessions with the Northern Virginia public safety and First Responder community, and will continue to support information-sharing about B2G2C digital strategies.

Thanks to the NVTC event sponsors, speakers, coordinators and volunteers, including:

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