News & Analysis as of September 18, 2024

Virtual Currency › Capital Losses

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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 -

When Virtual Currency Positions Are Subject to the Straddle Rules

McDermott Will & Emery on 6/18/2020

Taxpayers who hold virtual currency positions may be subject to the tax straddle rules that require them to defer losses on one offsetting position to the extent of unrecognized gain on other offsetting positions. This...more

Virtual Currency Losses Disallowed on Infrequent Activities

McDermott Will & Emery on 6/3/2020

If a taxpayer’s virtual currency activities are too infrequent to rise to the level of investment activities or do not qualify as trader or dealer activities, losses associated with virtual currency transactions are not...more

IRS Issues Guidance Regarding Virtual Currency Transactions

Skadden, Arps, Slate, Meagher & Flom LLP on 10/18/2019

On October 9, 2019, the Internal Revenue Service (IRS) issued long-awaited guidance relating to transactions involving virtual currencies, such as cryptocurrencies. Aligned with the agency’s continuing efforts to enforce tax...more

The Year of Bitcoin: Gains Subject to Tax by the IRS

Bowditch & Dewey on 12/14/2017

The year 2017 could be described as the year of the Bitcoin and other “virtual currencies,” with Bitcoin having appreciated 1800% since the beginning of the year and Ethereum, at one point, having appreciated 8,000% since the...more

Bitcoin and the Like: Further Tax Developments to Monitor

BakerHostetler on 5/14/2015

Virtual currency developments continue to emerge, including state tax guidance, a court decision on deductibility of losses, and the Uniform Fiduciary Access to Digital Assets Act (the “Act”). State Tax Guidance - The New...more

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