Cryptocurrency Tax Update: If There’s a Hard Fork in the Road, Take It (or Not)
Author: Brett Cotler.
Source: Volume 37, Number 02, Winter 2020 , pp.43-48(6)
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Abstract:
In October 2019, the Internal Revenue Service (IRS) released much-anticipated guidance regarding the taxation of virtual currencies. The IRS published Revenue Ruling 2019-24 (the “Ruling”), posted updated FAQs on its website, and released a Chief Counsel notice instructing revenue agents on audits involving virtual currency. Collectively, these pieces of guidance represent the IRS’s current thinking around the taxation of transactions involving virtual cryptocurrency. The IRS first released guidance on the subject matter in 2014 and has remained mostly silent since. This article (1) provides an overview of virtual currency taxation developments leading up to this round of guidance; (2) explores the current guidance; and (3) notes the questions that remain.Keywords: Rev. Rul. 2019-24, Notice CC-2020-003, Notice 2014-21, Cryptocurrency, Virtual Currency, Hard Fork, Airdrop, Crypto, Income Recognition
Affiliations:
1: Seward & Kissel LLP.