News & Analysis as of October 19, 2024

Internal Revenue Service

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Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect income taxes based on a progressive scheme, while others may utilize a proportional or regressive framework. less -

Knowing Me, Knowing You! Using Private Derivatives in Personal Tax Planning

Gerald Nowotny - Law Office of Gerald R.... on 8/7/2024

I mentioned my year long writing sabbatical last week. Over the course of the year, I have accumulated a few ideas to cover in new articles. One of those ideas is threading the needle of tax-exempt organizations with...more

Are you Thinking of Moving to Another Country - A Few Things to Consider

Allen Barron, Inc. on 5/31/2024

Are you thinking of moving to another country? Over the past decade, a record number of U.S. citizens have decided to live and work abroad. There are many issues you may not have considered that will impact any decision to...more

The Tax Consequences of Offshore Mutual Funds for US Expats and Taxpayers

Allen Barron, Inc. on 5/17/2024

What are the tax consequences of offshore mutual funds for US expats and taxpayers? US expatriates have faced a substantial number of challenges over the past several years as a result of FATCA. It can be hard to simply open...more

Partnership Transactions Lacking Economic Substance or Business Purpose: Investor Beware

Rivkin Radler LLP on 5/6/2024

Assume that X and Y agree to the following: X will transfer ownership of Prop to Y, and Y will transfer cash to X. What just happened? Obviously, X has sold Prop to Y. If the amount of cash that X receives is greater than...more

When is a US Taxpayer Required to Disclose Offshore Accounts on an FBAR and Form 8938

Allen Barron, Inc. on 4/30/2024

When is a US Taxpayer required to disclose offshore accounts on an FBAR and IRS Form 8938? While many US taxpayers and expatriates have come to understand the requirements of the FinCEN Form 114 or FBAR, a surprising number...more

US-Chile Income Tax Treaty Enters Into Force

Bilzin Sumberg on 1/4/2024

On December 19, 2023, the U.S. Treasury Department announced that the Income Tax Treaty between the United States and Chile (the “Treaty”) entered into force. The Treaty was originally signed in February of 2010, and, after...more

Release the Kraken Tax Transaction Information

Gray Reed on 11/6/2023

On June 30, 2023 the District Court in the Northern District of California granted a petition to enforce the cryptocurrency exchange Kraken to release customer information. Specifically, Kraken was ordered to produce the...more

The High IRS Tax Rates on a Foreign Trust

Allen Barron, Inc. on 10/31/2023

Are you concerned about the high IRS tax rates on a foreign trust? It is important to understand the tax and reporting consequences on this specific type of investment. It may very well be time to evaluate the net value of...more

Washington Court of Appeals Limits B&O Tax Deduction for Investment Income

Perkins Coie on 8/7/2023

The Washington Court of Appeals has held that investment funds are subject to Washington state business and occupation (B&O) tax on their investment income. Although Washington law allows taxpayers to deduct “amounts derived...more

IRS Says Crypto Protocol Changes Are Not Taxable

Cadwalader, Wickersham & Taft LLP on 5/25/2023

On April 21, 2023, the IRS released Chief Counsel Advice Memorandum 202316008 (the “CCA”), which provides that cryptocurrency protocol changes are not treated as realization events and do not give rise to gross income for...more

NFT Means Never Forget Taxes: Redux

Seward & Kissel LLP on 5/18/2023

The Internal Revenue Service released Notice 2023-27 (the “Notice”), providing guidance on the federal tax treatment of nonfungible tokens (“NFTs”). In a prior SKRYPTO blogpost, we noted that investors selling NFTs could be...more

IRS Gets Serious About Digital Asset Reporting by Individuals

Cadwalader, Wickersham & Taft LLP on 4/27/2023

Since 2019, Form 1040 has included a general question regarding the taxpayer’s cryptocurrency activity. Over the years, the IRS has modified the scope of its cryptocurrency inquiry. On the 2021 Form 1040, this question read:...more

Weekly IRS Roundup April 17 – April 21, 2023

McDermott Will & Emery on 4/25/2023

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 17, 2023 – April 21, 2023...more

IRS Releases Memorandum on Deducting Cryptocurrency Losses

McDermott Will & Emery on 1/27/2023

On January 13, 2023, the Internal Revenue Service (IRS) released a Chief Counsel Advice Memorandum (CCA 202302011) concluding that taxpayers cannot claim a deduction for cryptocurrency losses that have, absent a sale or other...more

Back to the Future ... Cryptocurrency Tax Reporting

Cadwalader, Wickersham & Taft LLP on 1/26/2023

The cryptocurrency industry may be breathing a sigh of relief following the release of recent IRS guidance on cryptocurrency tax reporting, which effectively postpones the January 1, 2023 effective date of the digital asset...more

Generating Tax Losses as a Hobby

Rivkin Radler LLP on 1/13/2023

Every now and then, some well-meaning colleague will ask how I spend my free time. I usually pause before responding – to gather my thoughts – which prompts them to restate their question with what they believe is greater...more

Big Win for Investors Facing Listed Transaction Penalties for Conservation Easements

Polsinelli on 11/16/2022

On November 9, 2022, in a 15-2 decision, the Tax Court held that the IRS improperly issued Notice 2017-10 in Green Valley Investors, LLC, et al. v. Commissioner of Internal Revenue, 159 T.C. No. 5. The Notice designated...more

Weekly IRS Roundup November 7 – November 11, 2022

McDermott Will & Emery on 11/15/2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 7, 2022 – November 11, 2022....more

Weekly IRS Roundup September 12 – September 16, 2022

McDermott Will & Emery on 9/20/2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 12, 2022 – September 16, 2022...more

International News: Spotlight on Tax

McDermott Will & Emery on 5/5/2022

INTRODUCTION TO US TAXATION OF NFTS - Despite Non Fungible Token (NFT) sales hitting nearly US$21 billion by the end of 2021, making NFTs almost as valuable as the global art market, they are currently completely ignored...more

Tax Considerations for Transactions of Non-Fungible Tokens

Foley & Lardner LLP on 4/29/2022

Creators, investors, users, and dealers of non-fungible tokens (NFTs) are at the forefront of the intersection of art, music, sports, entertainment, and technology — and they are simultaneously charting a new path when it...more

Thoughts on Cryptocurrency and Tax Partnerships

Gray Reed on 4/11/2022

Cryptocurrency holders often want to put their assets into an entity for a host of reasons, such as asset protection, arranging negotiated management rights and exit planning. This post discusses basic federal income tax...more

U.S. Treasury Signals that Cryptocurrency Miners & Stakers Will Not Be Subject to Broker Information Reporting Tax Requirements

Dechert LLP on 2/17/2022

On February 11, 2022, in a letter addressed to certain U.S. Senators, the U.S. Department of the Treasury indicated that cryptocurrency miners, cryptocurrency stakers or related hardware or software providers would not be...more

New Crypto Reporting Requirements Aim to Address Tax Gap

Kohrman Jackson & Krantz LLP on 2/11/2022

As cryptocurrencies such as Bitcoin rise in popularity, government regulators repeatedly try, and often fail, to control its use as a tax shelter. Agencies such as the IRS struggle with determining the best way to tax...more

How Will Virtual Currency Be Taxed?

Foodman CPAs & Advisors on 11/17/2021

Despite the confusing interpretations by US regulators, non-compliance with crypto tax rules can cost taxpayers dearly. Unfortunately, the answer to “how is virtual currency taxed” depends on who you ask....more

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