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
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?
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….
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
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
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?
It’s been no secret that virtual currency has been in the crosshairs of the Internal Revenue Service (IRS) for some time. Virtual currency is one of the IRS “campaigns” and criminal investigations related to crypto have already started. The IRS has been sending taxpayers “educational” letters to remind them and warn them of their tax … Continue reading The Times They Are a Changin’ – FBAR Reporting of Virtual Currency Foreign Accounts
The US Internal Revenue Service (IRS) released instructions to the draft 2020 Form 1040 on Oct 23rd. It may be recalled that a virtual currency question was introduced for the first time on the 2019 Form 1040 on Schedule 1. Not all taxpayers are required to complete Schedule 1. Now, the 2020 Form 1040 places the question … Continue reading Virtual Currency: IRS Sheds More Light for 2020 Tax Returns
On November 5, the Internal Revenue Service (IRS) made life more difficult for taxpayers who may have missed some foreign information return filings. The IRS quietly revised one of the four options to correct for missing information returns with respect to a US taxpayer’s interest in any offshore/foreign assets and holdings (e.g., Form 8938, Form … Continue reading IRS Stealth: Delinquent Information Submission Procedure Penalties May Apply Without Considering “Reasonable Cause” Statement
The Internal Revenue Service (IRS) just recently released the 2020 draft Form 1040. In your face right on page one, on a separately colored block: “At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?” This question first appeared for the 2019 tax return, but … Continue reading 2020 Tax Returns & Latest Crypto Developments – In the Crosshairs