News & Analysis as of October 12, 2024

Tax Planning

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Virtual Currency (aka Digital Currency or Digital Money) is a type of currency or medium of exchange that is not issued by any government nor guaranteed by a government currency. Despite lacking legal tender status, Virtual Currency is still traded and exchanged in some environments, typically online environments or communities. Bitcoin is the most well-known form of Virtual Currency. less -

IRS Issues First Draft of Cryptocurrency Reporting Form

Freeman Law on 6/12/2024

The IRS appears to be on the verge of changing the way digital asset (i.e., cryptocurrency) transactions are reported for federal tax purposes. On April 19, 2024, the IRS issued its first draft of Form 1099-DA, the intended...more

New IRS Guidance Provides a Spot of Certainty Amid Digital Asset Limbo

Morgan Lewis on 1/19/2024

Per recent transitional guidance, the IRS will not require taxpayers to report transactions involving receipt of digital assets under Section 6050I....more

Virtual Currency Ventures: Navigating Tax and Accounting Waters for Success

White and Williams LLP on 9/7/2023

Step into the fascinating world of virtual currencies, where digital marvels like Bitcoin and Dogecoin, have captured the attention of adventurers and investors alike. As you venture into this dynamic realm, it's important to...more

IRS Confirms That Staking Rewards Are Part of Gross Income

Wilson Sonsini Goodrich & Rosati on 8/3/2023

On July 31, 2023, the Internal Revenue Service (IRS) released Revenue Ruling 2023-14, which provides that cryptocurrency stakers should include the value of the rewards they earn from staking in their gross income....more

Congress Getting in on Barbenheimer Action, Goes for Crypto Tax Double Feature

Cadwalader, Wickersham & Taft LLP on 7/27/2023

Recent legislative action suggests that Congress is eager to resolve many unanswered crypto tax issues. On July 11, 2023, Senators Ron Wyden and Mike Crapo released an open letter to the “members of the digital asset...more

Playing the Waiting Game on Crypto Tax Reporting

Cadwalader, Wickersham & Taft LLP on 6/28/2023

As previously discussed here, the IRS published guidance in December 2022 effectively postponing the January 1, 2023 effective date for certain digital asset broker reporting rules until final regulations are promulgated. To...more

Cryptocurrency Wash-Sale Loss Harvesting

Bowditch & Dewey on 6/14/2023

The IRS wash-sale rule does not currently apply to cryptocurrency because the IRS considers virtual currencies to be property rather than securities. In general, a taxpayer who exchanges cryptocurrency for goods, services or...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

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

Tax Return Reporting of Cryptocurrency

ASKramer Law on 3/21/2023

You need to consider how you’ll report digital asset transactions on your 2022 tax returns. Tax reporting requirements for digital assets have changed yearly since 2019, when the IRS first added a question about crypto to IRS...more

Mini-Me Crypto Tax Legislation

Cadwalader, Wickersham & Taft LLP on 8/19/2022

Bipartisan crypto legislation was introduced by Senators Pat Toomey (R-PA) and Kyrsten Sinema (D-AZ) on July 26, 2022. If enacted, the Virtual Currency Tax Fairness Act would exclude from gross income gain on certain de...more

States Turning Eyes to Taxation of Cryptocurrency and Non-Fungible Tokens (NFTs)

Cadwalader, Wickersham & Taft LLP on 7/21/2022

As the IRS ponders its approach to taxing cryptocurrency and NFTs, states are increasingly imposing taxes on some digital asset transactions, including the use of cryptocurrencies...more

The Responsible Financial Innovation Act – A Bullet Point Summary

Akin Gump Strauss Hauer & Feld LLP on 6/13/2022

Key Points - On June 7, 2022, Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) released long-awaited legislation addressing the regulatory and tax treatment of digital assets. Their Responsible Financial...more

Crypto Trading Safe Harbor – We’re On Our Own

Cadwalader, Wickersham & Taft LLP on 5/25/2022

The District of Columbia Bar Tax Legislative and Regulatory Update Conference, a two-day conference on tax legislative and regulatory developments, included a one-and-a-half hour panel on taxation of cryptocurrencies and...more

NYSBA Tax Section’s Crypto Recommendations

Cadwalader, Wickersham & Taft LLP on 4/25/2022

On April 18, 2022, the New York State Bar Association (“NYSBA”) Tax Section published its second report on cryptocurrency and digital assets (“the Report”). The Report recommends...more

Today In Tax: Uncertainties Surrounding Cryptocurrencies, Mining, NFTs, and More

Miller Nash LLP on 4/8/2022

While the number of cryptocurrencies and other blockchain-based assets continue to grow, the IRS’s published guidance is inadequate in addressing how to tax these new digital assets and transactions involving them....more

NFTs: Gateway to Financial Independence or Litigation Risk?

Brownstein Hyatt Farber Schreck on 3/2/2022

NFTs—or “nonfungible tokens”—are everywhere. What was once seen as a collectors’ item for crypto geeks and LeBron James TopShop fanatics is now gaining popularity with a much wider audience. Take the recent example of the...more

Is Staking a Taxable Service?

Cadwalader, Wickersham & Taft LLP on 2/24/2022

On February 3, the Proof of Stake Alliance (“POSA”), a cryptocurrency industry association, issued a press release regarding recent developments in a cryptocurrency tax case, in which the IRS approved the tax refund sought by...more

Crypto Mining and Retirement Accounts

Freeman Law on 2/23/2022

Crypto Mining and Retirement Accounts - Crypto mining has been extremely profitable over the last few years, with Bitcoin miners making an estimated $15 billion of revenue and several mining companies going public in 2021....more

Proof-of-Stake Rewards: Payment for Services or a Baked Cake?

Orrick - On the Chain on 2/23/2022

Against the backdrop of rapidly evolving blockchain technology, the IRS has oftentimes been slow to update its related tax guidance, leaving participants in the blockchain ecosystem uncertain about their tax obligations....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

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Virtual Currency › Cryptocurrency › Tax Planning

IRS Issues First Draft of Cryptocurrency Reporting Form

New IRS Guidance Provides a Spot of Certainty Amid Digital Asset Limbo

Virtual Currency Ventures: Navigating Tax and Accounting Waters for Success

IRS Confirms That Staking Rewards Are Part of Gross Income

Congress Getting in on Barbenheimer Action, Goes for Crypto Tax Double Feature

Playing the Waiting Game on Crypto Tax Reporting

Cryptocurrency Wash-Sale Loss Harvesting

IRS Says Crypto Protocol Changes Are Not Taxable

IRS Gets Serious About Digital Asset Reporting by Individuals

Tax Return Reporting of Cryptocurrency

Mini-Me Crypto Tax Legislation

States Turning Eyes to Taxation of Cryptocurrency and Non-Fungible Tokens (NFTs)

The Responsible Financial Innovation Act – A Bullet Point Summary

Crypto Trading Safe Harbor – We’re On Our Own

NYSBA Tax Section’s Crypto Recommendations

Today In Tax: Uncertainties Surrounding Cryptocurrencies, Mining, NFTs, and More

NFTs: Gateway to Financial Independence or Litigation Risk?

Is Staking a Taxable Service?

Crypto Mining and Retirement Accounts

Proof-of-Stake Rewards: Payment for Services or a Baked Cake?

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

New Crypto Reporting Requirements Aim to Address Tax Gap

How the IRS Uses Social Media to Find Crypto Tax Cheats

Happy New $YEAR: How to deduct crypto losses on your 2021 tax return

The Taxation of Stablecoins

Virtual Currency › Cryptocurrency › Tax Planning

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