Alert

New IRS Cryptocurrency Guidance on Hard Forks and Airdrops: Rev. Rul. 2019-24, Audit Risks for U.S. Taxpayers

Recent IRS Audit Initiatives, Reporting, and Compliance Issues

Recording of a 90-minute premium CLE/CPE webinar with Q&A


Conducted on Thursday, February 27, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide an in-depth analysis of recently released IRS Revenue Ruling 2019-24 and the updated frequently asked questions (FAQs) regarding taxation of cryptocurrency. The panel will discuss the key provisions of Rev. Rul. 2019-24, recent IRS initiatives to identify and tax virtual currency, and new information on gain/loss calculations and gifts of cryptocurrency. The panel will also offer best practices in documenting and reporting cryptocurrency transactions in light of new IRS guidance.

Description

On Oct. 9, 2019, the IRS issued further guidance on the tax treatment of cryptocurrency. Revenue Ruling 2019-24 provides explicit insights into the taxation of "hard forks" or "airdrops" for those owning and exchanging cryptocurrencies. The IRS also updated its FAQs, providing guidance on other cryptocurrency issues.

In the IRS' first guidance on cryptocurrency since 2014, Rev. Rul. 2019-24 addresses (1) the taxation of a hard fork of cryptocurrency if there is no receipt of new cryptocurrency, and (2) the taxation of an airdrop after a hard fork when the taxpayer receives new cryptocurrency. The revenue ruling explains that cryptocurrency from an airdrop is taxable when the taxpayer can exercise "dominion and control" over the currency, not necessarily when the transaction is recorded in the distributed ledger (i.e., blockchain).

Also, new IRS FAQs provide critical guidance on the taxation of certain cryptocurrency transactions, identifying units sold and the reporting obligations of taxpayers. Tax professionals and advisers must recognize and understand the nuances of the tax treatment of cryptocurrency and identify audit risks.

Listen as our expert panel discusses the new IRS guidance on cryptocurrency, the calculation of gains and losses, handling the taxation of hard forks and airdrops, and the questions that remain surrounding taxation of virtual currency.

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Outline

  1. Tax treatment of cryptocurrency
  2. Impact of new Rev. Rul. 2019-24; hard forks and airdrops
  3. Updated IRS FAQs on cryptocurrency transactions
    1. Gain/loss calculations
    2. Gifts of virtual currency
    3. Charitable donations
  4. Current IRS focus and remaining questions for taxpayers
  5. IRS cryptocurrency tax reporting and compliance "educational" letters

Benefits

The panel will review these and other key issues:

  • What is the state of the current IRS initiative to tax virtual currency transactions?
  • What are hard forks and airdrops in the context of virtual currency transactions?
  • When and how are hard forks and airdrops taxed?
  • How should holders document virtual transaction activity?
  • What are the best practices in minimizing and handling an IRS audit stemming from cryptocurrency activities?

Faculty

Jaramillo, Victor
Victor A. Jaramillo

Member
Caplin & Drysdale

Mr. Jaramillo advises multinational corporations, financial institutions, and individual clients on a broad range of...  |  Read More

Ziering, Zhanna
Zhanna A. Ziering

Member
Caplin & Drysdale

Ms. Ziering offers guidance to individual and corporate clients who require sophisticated tax advice concerning their...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$347

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CPE Not Available

$347