Can a Virtual Currency Position Be Treated as a Commodity for Tax Purposes?

By on August 7, 2020

Some virtual currency units and positions are treated as commodities by Commodity Futures Trading Commission (CFTC) and US courts. The IRS has told taxpayers that it views convertible virtual currency as property, not foreign currency, for federal tax purposes. Lacking clear guidance from either the Internal Revenue Service (IRS) or the Department of the Treasury, this article addresses issues that may help determine whether Internal Revenue Code provisions that apply to commodities might also apply to transactions involving virtual currencies and positions.

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Andrea Kramer
Andrea (Andie) S. Kramer has a sophisticated and unique multi-disciplinary legal practice that covers all aspects of financial transaction, derivatives, and cryptocurrency, with a focus on taxation, regulation, contract design, trading operations and documentation. Andie helps clients successfully resolve difficult legal situations, including federal and state regulatory matters, adversarial proceedings, and tax planning and compliance issues while addressing interrelated business objectives, regulatory and legal requirements, and public policy. Read Andrea Kramer's full bio.