Paul L. Caron

Saturday, October 12, 2019

IRS Issues Cryptocurrency Tax And Reporting Guidance

Bloomberg Tax, IRS Adds Virtual Currency Question to Draft Income-Reporting Form:

Schedule 1

Rev. Rul. 2019-24:

  1. A taxpayer does not have gross income under § 61 as a result of a hard fork of a cryptocurrency the taxpayer owns if the taxpayer does not receive units of a new cryptocurrency.
  2. A taxpayer has gross income, ordinary in character, under § 61 as a result of an airdrop of a new cryptocurrency following a hard fork if the taxpayer receives units of new cryptocurrency.

[43] Frequently Asked Questions on Virtual Currency Transactions:

In 2014, the IRS issued Notice 2014-21, 2014-16 I.R.B. 938 (PDF), explaining that virtual currency is treated as property for Federal income tax purposes and providing examples of how longstanding tax principles applicable to transactions involving property apply to virtual currency.  The frequently asked questions (“FAQs”) below expand upon the examples provided in Notice 2014-21 and apply those same longstanding tax principles to additional situations.

Forbes, IRS Issues New Guidance On Virtual Currency

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