News & Analysis as of October 12, 2024

Blockchain

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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 -

Activos Digitales 2023 Formulario 1040

Foodman CPAs & Advisors on 2/15/2024

El 01/22/24, el IRS le recordó a los contribuyentes que deben responder nuevamente a la pregunta sobre activos digitales 2023 en los formularios 1040 y 1040-SR y reportar todos los ingresos relacionados con activos digitales...more

Digital Assets 2023 Form 1040

Foodman CPAs & Advisors on 2/15/2024

On 1/22/24, the IRS reminded taxpayers that they must again answer the digital asset 2023 question on Forms 1040 and 1040-SR and report all digital asset related income when they file their 2023 federal income tax return, as...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

IRS Issues Revenue Ruling 2023-14 on Staking

Fenwick & West LLP on 8/1/2023

On July 31, 2023, the IRS issued Revenue Ruling 2023-14, which sets forth the IRS’s position as to when certain staking “rewards” are taxable income. The Ruling analyzes a fact pattern where a cash method taxpayer “stakes...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

Top Trends in Digital Assets for 2022

Foley & Lardner LLP on 8/3/2022

It's no secret that cryptocurrency markets and the larger digital assets economy have been roiled by recent instability, resulting in discussions about how regulatory initiatives, rising inflationary pressure, and public...more

Tokenization Lawyer – 5 Reasons Why You Might Need One

Oberheiden P.C. on 5/17/2022

What is Tokenization? Tokenization is the process of converting an asset into a token on the blockchain. It operates by dividing—or fractionalizing—the ownership of an asset (whether the asset is a piece of real estate or...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

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

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

Crypto Tax Lawyers – 5 Things to Consider Before Hiring

Oberheiden P.C. on 2/7/2022

The IRS, Taxpayers, and Cryptocurrencies or virtual currencies - The Internal Revenue Service (“IRS”) issued its first guidance on cryptocurrencies— “virtual currencies''—in 2014, taking the position that crypto...more

Taxation of Crypto Mining

Freeman Law on 1/27/2022

Amid the crypto boom, mining has become an extremely lucrative venture for many and critical to maintaining decentralized cryptocurrency networks. It is no surprise then that mining has been subject to IRS scrutiny and...more

Is Cryptocurrency “Property” for U.S. Income Tax Purposes?

Freeman Law on 10/4/2021

Our firm has written extensively on the topic of cryptocurrency. Indeed, we have even designated an entire resource page on our website to this always interesting and constantly evolving topic...more

Finding John Doe, Part II: IRS Secures Another Victory to “Root Out” Virtual Currency Tax Noncompliance

McDermott Will & Emery on 5/7/2021

The Internal Revenue Service (IRS) has scored another significant victory in its rapidly increasing virtual currency tax enforcement efforts. On May 5, 2021, the US District Court for the Northern District of California...more

Wondering About The Tax Treatment Of A Cryptocurrency Hard Fork And Airdrop?

Foodman CPAs & Advisors on 12/13/2019

On 10/9/19, IRS issued Rev. Rul. 2019-24 addressing the issues of a Taxpayer having gross income under § 61 of the Internal Revenue Code as a result of a hard fork of a cryptocurrency that the Taxpayer owns if the Taxpayer...more

IRS Officials Discuss Promotional Airdrops, Pre-2018 Crypto-for-Crypto Exchanges, and Other Issues Not Addressed in Recent Tax...

Proskauer - Blockchain and the Law on 12/12/2019

In October of 2019, the U.S. Internal Revenue Service issued the first new guidance on the taxation of cryptocurrency transactions in over five years (the “Guidance”). The Guidance comprising a revenue ruling (Rev. Rul....more