The American Institute of Certified Public Accountants which is the world’s largest association of accounting professionals asked the IRS to issue immediate, updated guidance regarding the tax treatment of cryptocurrency transactions. The first IRS tax guidance for cryptocurrencies was introduced March 2014, few CPAs have done comprehensive analyses of the record-keeping and enforcement challenges that will arise from the IRS designation of Bitcoin as property rather than currency.
The AICPA’s submission to the IRS includes suggested Frequently Asked Questions that address the following areas:
- Expenses of obtaining virtual currency
- Acceptable valuation and documentation
- Computation of gains and losses
- Need for a de minimis election
- Valuation for charitable contribution purposes
- Virtual currency events
- Virtual currency held and used by a dealer
- Traders and dealers of virtual currency
- Treatment under Sec. 1031
- Treatment under Sec. 453
- Holding virtual currency in a retirement account
- Foreign reporting requirements for virtual currency
The lack of guidance around the taxation of cryptocurrencies pose uncertainties to the taxation of cryptocurrency and blockchain technology transactions. Additional guidance is largely overdue. Our team along with industry participants are awaiting answers and clarification from the IRS.
Are you looking for a CPA in for cryptocurrency tax help? Give Camuso CPA a call today. We also offer a host of other tax services for your benefit. For more information on how our services can help you, please do not hesitate to give us a call at your earliest convenience. One of our friendly and knowledgeable representatives will be happy to answer any questions that you may have.