Tax Implications of Cryptocurrency Mining: IRS Guidance, Entity Structures, Tax Traps, Identifying Taxable Events

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

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Conducted on Thursday, November 4, 2021

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Course Materials

This CLE/CPE webinar will provide tax counsel, accountants, and other advisers with a critical analysis of IRS tax treatment of cryptocurrency mining and reporting obligations. The panel will discuss the IRS position on the tax treatment of cryptocurrency, analyze IRS monitoring to increase compliance, and outline proper reporting for mining cryptocurrency and transactions.

Description

Entrepreneurs and investors continue to dive into the virtual currency market by structuring or investing in cryptocurrency mining businesses. However, the IRS continues to press concerns over the under-reporting of income from cryptocurrency transactions. Tax advisers for clients involved in cryptocurrency mining must understand the reporting and compliance requirements for those transactions.

Cryptocurrency is a digital currency using encryption techniques--rather than a central bank--to generate, exchange, and transfer currency units. The mining of cryptocurrency is how new virtual currencies are placed into circulation and the verification and addition of transactions to the blockchain public ledger. Typically, cryptocurrency miners are compensated via virtual tokens and currencies for providing this service.

The IRS treats all virtual currency as property rather than currency for U.S. tax purposes. The IRS requires reporting any transaction involving cryptocurrency as a sale or exchange of property, with the taxpayer bearing responsibility for calculating and maintaining basis in their virtual currency holdings.

Listen as our expert panel discusses the tax treatment of cryptocurrency and the proper reporting for mining cryptocurrency and transactions.

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Outline

  1. Overview of cryptocurrency mining
  2. IRS treatment of cryptocurrency mining transactions
  3. Valuation issues
  4. Tax reporting requirements
  5. Liability for failing to report cryptocurrency transactions properly

Benefits

The panel will review these and other key issues:

  • What are the income tax reporting requirements for cryptocurrency mining, exchanges, and valuations?
  • What are the major tax pitfalls to avoid and other challenges for cryptocurrency mining and investments?
  • What are the best practices in managing an IRS examination?

Faculty

Gordon, Andrew
Andrew B. Gordon, CPA
President; Tax Attorney
Gordon Law Group

Mr. Gordon concentrates on tax controversy and compliance, cryptocurrency law, FTC defense, internet law, and corporate...  |  Read More

Raff, Michael
Michael Raff
Director of Tax
Gordon Law Group

Mr. Raff manages the tax controversy (including resolutions, investigations, and compliance) and tax preparation...  |  Read More

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