Crypto – Harvest Your Tax Losses / Use Offsetting Positions While You Can – Deadline 12/31

The House Ways and Means Committee tax proposal unveiled last month has two provisions to shutter lucrative crypto tax loopholes.  These are the subject of today’s blog post: the “wash sale” rules and the “constructive sale” rules, both contained in the Internal Revenue Code at Sections 1091 and 1259, respectively. First let’s discuss the so-called … Continue reading Crypto – Harvest Your Tax Losses / Use Offsetting Positions While You Can – Deadline 12/31

Is There Really a “Solution” for Crypto Tax Noncompliance?

Now that the US Congress and the Internal Revenue Service (IRS) have digital asset transactions firmly in the crosshairs for investigations and reporting, we are in the midst of what I will call crypto-currency tax anxiety.  Millennials may make up a larger group of persons dealing with crypto, and may be very concerned about prior … Continue reading Is There Really a “Solution” for Crypto Tax Noncompliance?

What’s Happening with Crypto “Broker” Reporting and the Infrastructure Bill?

The US Senate released legislative text of a 2,702-page bipartisan infrastructure bill (HR 3684) on August 1, 2021. It includes proposed tax law changes as well other budgetary offsets.  One of the biggest revenue raisers is contained in Section 80603 of the bill “Information Reporting for Brokers and Digital Assets”  (to be found on page … Continue reading What’s Happening with Crypto “Broker” Reporting and the Infrastructure Bill?

Checked “YES” to the Crypto Question on Form 1040? Have NFTs? Get Ready….  

It’s been no secret that the Internal Revenue Service (IRS) has cracked down on crypto.  With many more taxpayers investing in cryptocurrencies the agency has targeted crypto investors who are often not complying with the US tax rules (many unknowingly). IRS “John Doe” subpoena activity of crypto exchanges has been successful with the biggies such … Continue reading Checked “YES” to the Crypto Question on Form 1040? Have NFTs? Get Ready….  

IRS Wants Crypto Information from Foreign Countries

Last week during testimony to the Senate Finance Committee (SFC), US Internal Revenue Service Commissioner (IRS) Charles Rettig stated that Congress needs to provide clear statutory authority in order for the IRS to collect information on cryptocurrency transfers valued over US$10,000.  It is believed that such transfers are generally not being reported. Cryptocurrency market capitalization … Continue reading IRS Wants Crypto Information from Foreign Countries

Renouncing One’s US Citizenship: More Audits, Virtual Currency, CLN & Travel

COVID-19 restrictions have severely limited services at US embassies and consulates around the world. As a result, renouncing one’s US citizenship has become very difficult, and in many cases, just about impossible at the current time. This gives individuals more time to make sure they have properly planned for expatriation. It's a big step. I … Continue reading Renouncing One’s US Citizenship: More Audits, Virtual Currency, CLN & Travel

Third Party Reporting of Virtual Currency: Who’s Telling the IRS What?

Many of my readers are aware that I have written various blog posts about the US tax issues that surround virtual currency. Some have asked, (perhaps innocently, perhaps not), about so-called “third party reporting” of virtual currency to the Internal Revenue Service (IRS) .  For those who do not know what this means – it’s … Continue reading Third Party Reporting of Virtual Currency: Who’s Telling the IRS What?

IRS’ Crypto Guidance – No, You Cannot Rely On It.

Cyptocurrency (such as Bitcoin) is a type of virtual currency. This is an emerging area and consequently transactions involving use of crypto come with an enormous amount of US tax uncertainty. The Internal Revenue Service (IRS) has taken a keen interest in virtual currency since its use provides a way for taxpayers to avoid tax … Continue reading IRS’ Crypto Guidance – No, You Cannot Rely On It.

Cryptocurrency: Dissecting Revenue Ruling 2019-24 Treatment of Chain Splits

In this Tax Notes article published today, February 24, 2020 attorneys Arvind Ravichandran and Maurio Fiore, associates at the law firm Cravath, Swaine & Moore LLP, explain in fascinating detail the ABC’s of cryptocurrency, the workings of the mysterious blockchain technology and carefully dissect the IRS’ recent guidance enunciated in Revenue Ruling 2019-24. The article … Continue reading Cryptocurrency: Dissecting Revenue Ruling 2019-24 Treatment of Chain Splits