Freeman Law Webinar Archive: Cryptocurrency and Blockchain Taxation and Regulation Cryptocurrency taxation continues to raise interesting, sometimes intractable questions. But while taxpayers are required to report and pay taxes on income from virtual currency use, the IRS has, to date, issued very limited guidance on tax compliance when it comes to virtual currencies. Nonetheless, in July of 2019, the …
In 2014, the IRS announced that the use of convertible virtual currency to pay for goods or services in a real-world transaction has tax consequences.[1]Those consequences may result in a tax liability for the consumer. As a result—particularly in light of the IRS’s efforts to crackdown on failures to report cryptocurrency transactions, see here and here—it’s important to understand how cryptocurrency …
What are the tax implications of a cryptocurrency Hard Fork? Does the holder of a cryptocurrency that undergoes a Hard Fork realize taxable income? If so, how does one determine the amount of the income and when, exactly, it is received? These are not easy questions to answer. What is a Hard Fork? A Hard Fork—sometimes referred to as a “Chain …
“Nothing is certain but death and taxes”—even when it comes to cryptocurrency. [1] That time-tested insight, traditionally attributed to Benjamin Franklin, appears poised to go head to head with the technological innovations behind the cryptocurrency movement. Cryptocurrency, such as Bitcoin, is virtual currency that uses cryptography for security.[2] It is not issued by any central governmental authority, rendering it—theoretically at …
Last week, the Department of Justice filed new arguments in United States v. Coinbase, responding to an unnamed intervenor (a “John Doe”) who is challenging the government’s effort to obtain records of Bitcoin and other virtual currency transactions. The Coinbase case involves an effort by the IRS to enforce a “John Doe” summons that would require Coinbase (a virtual currency …
Bitcoin and other virtual currencies are often thought to provide anonymity, allowing parties to move funds across the globe virtually without revealing their identity. But that’s not exactly how it works. Contrary to popular belief, Bitcoin is not anonymous; it is pseudonymous—and there’s a difference. All Bitcoin transactions are linked to an address on a publicly-accessible Blockchain, a ledger of all …
