When Can Bitcoin Positions Be Taxed as Mixed Straddles Subject to the Special Mixed Straddle Rules?

By on August 31, 2020

Taxpayers who enter into offsetting positions in actively traded personal property where one or more—but not all—of the positions making up a straddle are taxed as section 1256 contracts (while another offsetting position is not a section 1256 contract) are subject to the mixed straddle rules. Potential adverse consequences can be magnified or made more complex by application of these special rules. This article can help taxpayers understand and take action to minimize or avoid these consequences when such positions involve virtual currencies.

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Andrea KramerAndrea 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.

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