Tax Benefits
The benefits of Digital Gem is that because of it's low inflation rate, your token's value will not be eroded. At 0.25% inflation rate per year, if we hold all variables the same, your token's value will only decrease by 2.5% in ten years.
Compared to fiat currencies whereby the target inflation rate is 2% to 3% per year, Digital Gem is a great store of value.
The low inflation rate of Digital Gem is also great for tax purposes because Digital Gems are mostly only taxable when you decide to sell them.
Other Proof of Stake coins usually have a very high inflation rate which forces you to stake your coins or get left behind the inflation curve. A disadvantage to that is that there is taxable income generated every time you receive a staking reward.
Here is a more detailed explanation:
Taxation of cryptocurrencies falls into two parts.
1) Ordinary Income
2) Capital Gains
There are two instances in which you have to pay taxes on cryptocurrencies.
First instance - Staking rewards:
Staking rewards are ordinary income which is taxed every time you receive them. For example, if you staked $1000 in a coin and it generated $50 in staking rewards every day, you will have $50 of taxable income every day.
Digital Gem has very low staking rewards as the inflation rate is very low so you don't even need to stake in order to preserve your coin's value.
Second instance - Selling your tokens:
Cryptocurrencies are also taxed when you exchange them for another coin or use them to purchase coffee. The amount of tax is calculated as (what the coin is worth right now) minus (what you paid for your coin). It is taxed as capital gains.
Capital gains are taxed at a lower rate than ordinary income so whenever you decide to sell Digital Gem or buy coffee with it, your tax bill will be lower than if you went with a Proof of Stake cryptocurrency with a higher inflation rate.
So, in conclusion, you can't lose with Digital Gem.