Nuts & Bolts of Cryptocurrency Taxation
Webinar Details $219
- Webinar Length: 100 Minutes
- Guest Speaker: Shehan Chandrasekera
- Topic: Taxation and Accounting
- Credit: CPE 2.0, ATATX 1.5
46 million Americans now own bitcoin. Yet, only a few tax professionals understand how to help individuals and businesses dealing with cryptocurrency. This session walks you through tax implications of common cryptocurrency-related transactions and how to successfully service clients affiliated with cryptocurrency. We will also cover current developments surrounding this topic, such as the inclusion of the virtual currency question on the front of Form 1040, how to successfully navigate through tax notices (CP2000, Letter 6173, Letter 6174 & Letter 6174-A) and tax planning opportunities.
- Recognize the latest in blockchain technology and how it is impacting our world
- Understand how to interact with cryptocurrency
- Understand the tax implications of investing in cryptocurrency, running a mining operation, using NFTs, and using cryptocurrency as a payment method
- Recognize challenges in dealing with cryptocurrency-related clients
- Apply tax planning opportunities
- Serve clients with cryptocurrency transactions using a tool like CoinTracker.io
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Taxes
Program Prerequisites: None
Advance Preparation: None
- Bio 00:03:19
- Contents 00:03:59
- Fun Fact 00:07:43
- How Do You Get Crypto? 00:08:52
- How Do You Store Crypto? 00:15:26
- What Do You Use Cryptocurrency For? 00:18:06
- Why Coins Have Value? 00:24:36
- What Is Blockchain Technology? 00:29:52
- Where Are We Now? 00:33:34
- Where Are We Now? - Form 1040 00:38:39
- 2021 Virtual Currency Question 00:39:45
- Tax Overview 00:44:01
- Investors 00:44:59
- Investors - Examples 1 & 2 00:47:13
- Investors - Example 3 00:49:11
- Investors - Sample Report 00:52:02
- Advantage Of Using CoinTracker.io 00:53:03
- Tax Forms - Form 8949 00:53:44
- Miners 00:54:40
- Other Transactions 00:58:13
- Foreign Reporting 01:03:08
- Other Developments 01:06:26
- Other Developments - 2021 Virtual Currency Question 01:06:44
- Other Developments - The Infrastructure Bill & Crypto 01:08:07
- Other Developments - Decentralized Finance (DeFi) and Stablecoins 01:13:10
- Other Developments - Like-Kind Exchange Treatment and Subpoenas 01:13:57
- Other Developments - Non-Fungible Tokens (NFTs) and Enterprise 01:16:01
- Other Developments -Operation Hidden Treasure/FAQs and 2019-24 01:18:49
- Key Highlights of 10/09/19 FAQs and 2019-24 01:20:56
- Key Highlights of 10/09/19 FAQs and 2019-24 (Cont’d) 01:21:37
- Tax Notices - Letter 6173, 6174, 6174-A, and CP2000 01:22:33
- Tax Planning Opportunities 01:25:34
- Tax Planning Opportunities - Wash Sales Rules and FIFO/LIFO/HIFO 01:25:42
- Tax Planning Opportunities - Getting A Loan And Accelerating Deductions 01:28:40
- Tax Planning Opportunities - Opportunity Zones and Self-Directed Crypto IRA 01:30:58
- Why Accountants Need to Care? 01:33:46
- Cheat Sheet 01:37:28
- Q & A? 01:39:24
- Presentation Closing 01:39:54
- Bitcoin 00:00:09:20, 00:13:04, 00:25:50, 00:32:09, 01:16:15
- Blockchain 00:29:59
- CP2000 01:25:06
- Cryptocurrency 00:04:35, 00:09:19, 00:10:48, 00:32:44, 00:39:56, 01:00:32
- Decentralized Finance (DeFi) 01:13:14
- DigiCash 00:34:03
- Fair Market Value (FMV) 00:55:26
- FATCA 01:04:25
- FBAR 01:03:27
- FIFO 00:53:21, 01:22:27
- Form 1040 00:39:00
- Form 1099-B 00:46:09, 00:52:18, 00:53:57, 01:08:47
- Form 1099-K 00:46:49, 01:25:13
- Form 8949 00:53:49
- HIFO 00:53:22, 01:28:26
- IRS Notice 2014-21 00:44:20
- LIFO 00:53:22
- Like-Kind Exchange 01:33:58
- Non-Fungible Tokens (NFT) 00:27:56, 01:16:03
- Rev. Rul. 2019-24 00:37:20, 00:44:27, 01:
- Stablecoins 01:13:38
Bitcoin: Bitcoin is a cryptocurrency. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
Blockchain: Blockchain.com is a Bitcoin block explorer service, as well as a cryptocurrency wallet supporting Bitcoin, Bitcoin Cash, and Ethereum. They also provide Bitcoin data charts, stats, and market information.
Cryptocurrency: A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a digital ledger or computerized database using strong cryptography to secure transaction record entries, to control the creation of additional digital coin records, and to verify the transfer of coin ownership.
Decentralized Finance (DeFi): Decentralized finance is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum.
DigiCash: DigiCash Inc. was an electronic money corporation founded by David Chaum in 1989. DigiCash transactions were unique in that they were anonymous due to a number of cryptographic protocols developed by its founder.
FATCA: FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. (www.treasury.gov). FACTA (Fair and Accurate Credit Transactions Act) is an amendment to FCRA (Fair Credit Reporting Act ) that was added, primarily, to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal and limits the ways consumer information can be shared.
FIFO: FIFO and LIFO accounting are methods used in managing inventory and financial matters involving the amount of money a company has to have tied up within inventory of produced goods, raw materials, parts, components, or feedstocks.
Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.
Foreign Bank and Financial Accounts (FBAR): FBAR refers to Form 114, Report of Foreign Bank and Financial Accounts, that must be filed with the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the Treasury Department. ... The FBAR Form 114 is filed separately and directly with FinCEN
Form 1040: Form 1040 is used by U.S. taxpayers to file an annual income tax return. The form calculates the total taxable income of the taxpayer and determines how much is to be paid or refunded by the government.
Form 1099-B: Proceeds From Broker and Barter Exchange Transactions is an Internal Revenue Service (IRS) tax form that is issued by brokers or barter exchanges. The form lists the gains or losses of all broker or barter exchange transactions.
Form 1099-K: A payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year. A PSE makes a payment in settlement of a reportable payment transaction, that is, any payment card or third party network transaction, if the PSE submits the instruction to transfer funds to the account of the participating payee to settle the reportable payment transaction.
Form 8949: Use Form 8949 to report sales and exchanges of capital assets. Form 8949 allows you and the IRS to reconcile amounts that were reported to you and the IRS on Forms 1099-B or 1099-S (or substitute statements) with the amounts you report on your return.
HIFO: Highest in, first out (HIFO) is a method of accounting for a firm's inventories wherein the highest cost items are the first to be taken out of stock. HIFO inventory helps a company decrease their taxable income since it will realize the highest cost of goods sold.
IRS Notice 2014-21: This notice describes how existing general tax principles apply to transactions usingvirtual currency. The notice provides this guidance in the form of answers to frequentlyasked questions.
LIFO: LIFO stands for “Last-In, First-Out”. It is a method used for cost flow assumption purposes in the cost of goods sold calculation. The LIFO method assumes that the most recent products added to a company’s inventory have been sold first. The costs paid for those recent products are the ones used in the calculation.
Like-Kind Exchange: A like-kind exchange under United States tax law, also known as a 1031 exchange, is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset.
Non-Fungible Tokens (NFT): A non-fungible token is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files.
Rev. Rul. 2019-24: The revenue ruling addresses: (1) whether a hard fork of a cryptocurrency creates taxable income under § 61 if the taxpayer does not receive the new cryptocurrency, and (2) whether a hard fork with an airdrop creates taxable income when the taxpayer receives the new cryptocurrency.
Stablecoins: Stablecoins are cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities.