Tax Implications of Cryptocurrency Validation Rewards: Mining and Staking
IRS Guidance to Date, Identifying Taxable Events and Traps, Valuation, Classifying DAOs, Harvesting Losses
Recording of a 90-minute premium CLE/CPE video webinar with Q&A
This CLE/CPE webinar will provide tax counsel, accountants, and other advisers with a critical analysis of the correct U.S. federal income tax treatment of different types of cryptocurrency block rewards—specifically newly minted tokens and other rewards created or received from the “mining” or “staking” activities of the taxpayer that successfully validated transactions on the blockchain or other distributed ledger.
- Overview of Cryptocurrency Guidance to Date
- Tax Implications of Validating Block Rewards
- Mining of Cryptocurrencies
- What is mining technologically?
- IRS guidance on mining
- Timing of Income Recognition
- Character and Source
- Tax traps
- Staking of Cryptocurrencies
- What is staking technologically?
- Classic tax trap and controversy
- Jarrett v. United States, U.S. Dist. Court (Central Tenn. 2022).
- IRS Priority Guidance Plan 2023
- Choices regarding the timing of Income Recognition
- Choices regarding the character and Source
- Importance of substantiating taxpayer’s tax position
- Mining of Cryptocurrencies
- Valuation Issues regarding Mining and Staking
- Liability for failing to report cryptocurrency transactions properly
- DAOs – “Decentralized Autonomous Organizations”
- What are DAOs-
- U.S. and international tax implications of various classifications
- Harvesting and Reporting Losses
- Key Takeaways and Q&A
The panel will review these and other key issues:
- How does staking differ from mining, and how do they differ in terms of their U.S. income tax treatment?
- What are the major tax pitfalls to avoid in advising clients who are involved in mining and/or staking activities?
- How and when should mining and staking block rewards be valued?
- How do decentralized autonomous organizations (DAOs) relate to the US tax analysis and tax treatment of mining and staking activities?
- How can economic losses in block rewards be harvested?
- What are the best practices in avoiding or managing an IRS examination involving mining and staking activities?
Pamela A. Fuller, Esq., J.D., LL.M. (Taxation)
Senior Counsel (Tax, M&A, International)
Tully Rinckey PLLC and Zahn Law Group
Ms. Fuller’s practice has a triple focus: tax planning, tax controversies, and tax compliance. She advises a wide... | Read More
Ms. Fuller’s practice has a triple focus: tax planning, tax controversies, and tax compliance. She advises a wide range of clients–including private and public companies, joint ventures, funds, high-net-worth individuals, C-Suite executives, and government entities–on transactional, investment, and supply-chain strategies to achieve optimal tax and business results. Ms. Fuller advises clients on both purely domestic transactions and transnational ones, helping both U.S.-based companies and foreign companies (and their executives) achieve the best possible results from a tax and business perspective. Ms. Fuller is Chair of the ABA’s Tax Section’s Tax Policy Committee, and also Co-Chair of the International Tax Committee of the ABA’s worldwide International Law Section. She frequently speaks at law conferences, and publishes papers on international tax topics in peer-reviewed law journals.Close
Nelson Mullins Riley & Scarborough
Mr. Wagner represents individuals and businesses in all aspects of tax controversy matters, as well as corporate... | Read More
Mr. Wagner represents individuals and businesses in all aspects of tax controversy matters, as well as corporate transactions and tax planning, and general business advice. He represents clients in federal and state tax audits, tax litigation, and federal and state tax collection matters. Mr. Wagner advises and provides counsel on both foreign and domestic tax compliance, voluntary disclosure matters, excise tax issues, tax fraud, and other white-collar cases. He also advises clients on mergers and acquisitions as well as overall business organizations and corporate structures.Close