Special Tax Rules Apply to Bitcoin Futures and Options

By Andrea Kramer on August 24, 2020

Special tax rules require taxpayers to treat gains on certain virtual currency positions as taxable even though they still hold their positions. These rules apply to futures and options that qualify as section 1256 contracts, which is potentially relevant to taxpayers buying, selling and holding Bitcoin futures and options, as well as Ether futures and other virtual currencies. This article reviews a number of issues that arise—or may arise in the future—for taxpayers with virtual currency positions.

Access the full article here.

Tags: 60/40 rule, Bitcoin, CFTC, Chicago Mercantile Exchange, cryptocurrency, ErisX, ether, fintech, futures and options, IRS, mark-to-market rule, QBEs, RFCs, section 1256, virtual currency

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.

Special Tax Rules Apply to Bitcoin Futures and Options

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