As the tax season winds to a close, tax practitioners and taxpayers can once again begin the process of looking ahead. However, this tax filing season has left several questions unanswered. In particular, the treatment of certain cryptocurrency transactions have left taxpayers searching for answers without a clear path forward.
Generally, the basic tax treatment of cryptocurrency has been addressed. In Notice 2014-21, the IRS alerted taxpayers that cryptocurrency will be subject to the same laws surrounding other forms of property. Although this concept seems straightforward, the nature of cryptocurrency has already lead to several substantial complications. For instance, simply determining the value of a cryptocurrency at any given moment may depend greatly on the exchange you are looking at and, given the volatility of the market, the time of day.
Compounding these issues is the general lack of public understanding surrounding the taxability of cryptocurrency. In US v. Coinbase Inc., the […]