The Internal Revenue Service (IRS) views convertible virtual currency as property, not foreign currency. As such, taxpayers must record and track the tax basis of each unit of virtual currency held in order to properly report taxable gain or loss when disposing of a unit or units of virtual currency. This article reviews the IRS’s position with respect to the identification and tax basis of such units.
Specific Identification of Virtual Currency Positions
By McDermott Will & Emery on July 31, 2020
Posted In IRS Guidance, Tax Reform