What is “monetization”? Monetization is the process by which property is converted into money or something else of value. In the context of the Inflation Reduction Act of 2022 (IRA), certain provisions can allow entities that...more
9/25/2024
/ Energy Projects ,
Energy Sector ,
Energy Tax Incentives ,
Inflation Reduction Act (IRA) ,
Internal Revenue Code (IRC) ,
Investment Tax Credits ,
IRS ,
Monetization ,
Production Tax Credit ,
Renewable Energy ,
Tax Credits ,
Tax Exempt Entities ,
Tax Incentives ,
Tax Liability
What is the Low-Income Communities Bonus Credit? The Low-Income Communities Bonus Credit available through the Inflation Reduction Act of 2022 (IRA) is designed to increase the siting of, and access to renewable energy...more
9/19/2024
/ Clean Energy ,
Competitive Bidding ,
Economic Development ,
Energy Projects ,
Energy Sector ,
Housing Developers ,
Inflation Reduction Act (IRA) ,
Internal Revenue Code (IRC) ,
Investment Tax Credits ,
IRS ,
Production Tax Credit ,
Renewable Energy ,
Solar Energy ,
Tax Credits ,
Wind Power
What is a hedged executory contract? A “hedged executory contract” is another type of transaction that is eligible for integration under Code Section 988(d). A hedged executory contract results when a taxpayer enters into an...more
6/12/2024
/ Capital Assets ,
Capital Gains ,
Capital Losses ,
Financial Transactions ,
Foreign Currency ,
Foreign Entities ,
Hedges ,
Hedging ,
Internal Revenue Code (IRC) ,
IRS ,
Securities ,
Tax Planning
Are there special hedging provisions for section 988 transactions? Yes. In addition to the business hedging rules I address in our earlier Q&A with Andie series, a special hedging provision is available at Code section 988(d)...more
6/5/2024
/ Capital Assets ,
Capital Gains ,
Capital Losses ,
Financial Transactions ,
Foreign Currency ,
Foreign Entities ,
Hedges ,
Hedging ,
Internal Revenue Code (IRC) ,
IRS ,
Tax Planning
Which transactions qualify as section 988 transactions?
In section 988 transactions, the taxpayer makes payments or receipts denominated in or determined by reference to one or more nonfunctional currency. ...more
Are all foreign currency gains taxable?
No. Under a de minimis exemption individual taxpayers with foreign currency gains of $200 or less on a “personal transaction” do not need to report them....more
Navigating the federal taxation of foreign currency can be compared to trying to cross a perilous sea. Both involve unexpected rough patches, serious difficulties, and frustrating complexity....more
What is the “tax character” of a hedge? A taxpayer receives ordinary gain or loss on qualified hedges that have been properly identified in accordance with Treasury Regulation § 1.1221-2. This allows a taxpayer to ensure that...more
4/12/2024
/ Asset Management ,
Business Taxes ,
Capital Losses ,
Corporate Taxes ,
Debt ,
Hedges ,
Hedging ,
Interest Rates ,
Internal Revenue Code (IRC) ,
Investment ,
Reporting Requirements ,
Risk Management ,
Tax Planning
Enterprise Risk Management is widely used in many industries and businesses. Risk managers use increasingly sophisticated approaches, methods, analytics, and frameworks to manage complex, interrelated, and interconnected...more
Are there differences in the way in which weather derivatives and weather insurance are taxed? Yes. Weather insurance products, including parametric insurance, are taxed as insurance; and derivatives are taxed in accordance...more
3/27/2024
/ Business Expenses ,
Business Interruption ,
Business Losses ,
Climate Change ,
Derivatives ,
Insurance Industry ,
Internal Revenue Code (IRC) ,
Policy Terms ,
Popular ,
Property Damage ,
Risk Management ,
Severe Weather
Taxpayers can receive significant tax benefits when donating cryptocurrency and other appreciated digital assets to a charity. This article looks at some key considerations to keep in mind as you consider all your options....more
Charities should address several issues when considering whether to accept donations of digital assets, defined to include cryptocurrency, stablecoins, and non-fungible tokens (NFTs)....more
11/15/2023
/ Capital Assets ,
Charitable Donations ,
Cryptoassets ,
Cryptocurrency ,
Digital Assets ,
Donations ,
Donors ,
Gifts ,
Internal Revenue Code (IRC) ,
IRS ,
Non-Fungible Tokens (NFTs) ,
Stablecoins
As we’re approaching year end, this is a good time to revisit the tax rules that apply to donating noncash property—including donations of digital assets....more
Taxpayers can take a tax deduction with respect to “theft” losses that result from an illegal “taking of property” done with criminal intent. Among various other types of criminal activities, fraud is treated as theft under...more
10/11/2023
/ Cryptoassets ,
Cryptocurrency ,
Department of Justice (DOJ) ,
Digital Assets ,
Extortion ,
Fraud ,
Internal Revenue Code (IRC) ,
IRS ,
Non-Fungible Tokens (NFTs) ,
Phishing Scams ,
Ponzi Scheme ,
Ransomware ,
Safe Harbors ,
Scams ,
Tax Deductions ,
Tax Losses ,
Theft
In December 2022, I was quoted in an article in “Tax Notes” by Lee Sheppard to the effect that the wash sales rule in Internal Revenue Code (Code) Section 1091(a) (losses from wash sales of stock or securities) doesn’t apply...more
We’re seeing an increasing variety of digital tokens that represent rights to, interests in, or ownership of an entity. We’re also seeing digital tokens that represent debt obligations of corporations. These tokens can be...more
The taxation of derivatives and financial products has developed in an uncoordinated and piecemeal fashion. Tax rules have largely been enacted in response to what the government has perceived as abusive transactions —...more
3/22/2023
/ Anti-Abuse Rule ,
Asset Management ,
Derivatives ,
Financial Products ,
Internal Revenue Code (IRC) ,
Investment ,
Investors ,
IRS ,
Tax Liability ,
Tax Planning ,
Wash Sale Rules
You need to consider how you’ll report digital asset transactions on your 2022 tax returns. Tax reporting requirements for digital assets have changed yearly since 2019, when the IRS first added a question about crypto to IRS...more
3/21/2023
/ Bitcoin ,
Cryptocurrency ,
Digital Assets ,
Financial Planning ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investment Products ,
IRS ,
Non-Fungible Tokens (NFTs) ,
Stablecoins ,
Tax Liability ,
Tax Planning ,
Virtual Currency
When it comes to the taxation of stock options, the Internal Revenue Code (Code) does not define capital assets. Rather, it identifies those assets that are not capital assets. ...more
Explosive growth in digital assets has left investors with real questions about how to donate cryptocurrency and non-fungible tokens. That the tax bills are high enough to generate this interest is clear evidence of the gains...more
3/6/2023
/ 501(c)(3) ,
Charitable Donations ,
Cryptocurrency ,
Digital Assets ,
Donor-Advised Funds (DAFs) ,
Internal Revenue Code (IRC) ,
IRS ,
Non-Fungible Tokens (NFTs) ,
Tax Deductions ,
Tax Incentives ,
Tax Planning