Basics and Beyond of Crypto Taxation: What Preparers Need to Know Presentations & Takeaway Materials
Part 1: Intro to Cryptocurrency
Cryptocurrency, or virtual currency, is a digital representation of value currently used both as a medium of exchange and as an investment. The IRS considers virtual currency to be property; in many cases, basic property tax law works well for virtual currency. Unfortunately, there are also many crypto activities for which property tax law just doesn’t apply and there is no IRS guidance to support a tax position. Understanding the concepts underlying cryptocurrency helps the tax preparer determine how to handle those activities on the tax return.
In the first section of this 2-part webinar, our presenter, Amy M. Wall, will introduce the underlying concepts of decentralized finance; demystify common Cryptoverse jargon; and review the IRS guidance released to date. She’ll also discuss what the IRS has done and is doing to force tax compliance in the Cryptoverse and how to respond to the 2022 “Crypto Question.”
Opinions expressed by Ms. Wall are solely her own and do not necessarily express the views or opinions of TaxAct Professional.
Part 2: Crypto Taxation Best Practices and Beyond
In Part 2, we’ll apply that IRS guidance to real-world virtual currency activities, using case studies and examples, including sales, trades, staking rewards, airdrops, forks, and investments in initial offerings such as ICOs, IDOs, IEOs and ITOs. We’ll also cover crypto donations, gifts, and inheritances. Then Amy will dive into circumstances for which the IRS has provided no answers (such as taking losses if your client has been the victim of a scam, or a rug pull) and offer suggestions on how to handle these situations. Finally, you’ll walk away from this webinar with a set of “Best Practices” to help your office work with crypto clients, along with a suggested engagement letter and crypto questionnaire. With these takeaway items, you’ll be equipped to better understand what crypto activities your client has engaged in.