McDermott Will & Emery
Subscribe to McDermott Will & Emery's PostsWhen Virtual Currency Positions Are Subject to the Wash Sales Rule
By McDermott Will & Emery on Aug 19, 2020
Posted In IRS Guidance, Tax Reform
Under the wash sales rule, taxpayers cannot deduct a loss on the sale of stock or securities if the taxpayer purchases the same or substantially similar assets a short time before or after the sale that triggered the loss. This article examines possible application of the wash sales rule to virtual currencies. Access the full...
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What Is the Significance of Virtual Currency Not Being Taxed as Currency?
By McDermott Will & Emery on Aug 14, 2020
Posted In IRS Guidance, Tax Reform
Virtual currencies are not currently accepted as the legal tender or “fiat” currency of any country. In the United States, the IRS has stated its view that convertible virtual currency is property, subject to the general tax rules that apply to property, and is not foreign currency. As such, virtual currency does not qualify for...
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Can a Virtual Currency Position Be Treated as a Security for Tax Purposes?
By McDermott Will & Emery on Aug 12, 2020
Posted In IRS Guidance, Tax Reform
Some virtual currency units and positions are treated as securities by the Securities and Exchange Commission (SEC) and US courts. The Internal Revenue Service (IRS), however, has told taxpayers that it views convertible virtual currency as property, not foreign currency, for federal tax purposes. Lacking clear guidance from the IRS or the Department of the...
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Can a Virtual Currency Position Be Treated as a Commodity for Tax Purposes?
By McDermott Will & Emery on Aug 7, 2020
Posted In IRS Guidance, Tax Reform
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,...
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Virtual Currency Losses Disallowed on Infrequent Activities
By McDermott Will & Emery on Aug 5, 2020
Posted In IRS Guidance, Tax Reform
If a taxpayer’s virtual currency activities are too infrequent to rise to the level of investment activities or do not qualify as trader or dealer activities, losses associated with virtual currency transactions are not deductible. This article explores tax-law issues that arise in the context of “personal use virtual currency” and reminds taxpayers to be...
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Specific Identification of Virtual Currency Positions
By McDermott Will & Emery on Jul 31, 2020
Posted In IRS Guidance, Tax Reform
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...
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The Legal Effect of IRS Pronouncements on Virtual Currency
By McDermott Will & Emery on Jul 29, 2020
Posted In Court Procedure Matters, IRS Guidance, Tax Reform
Given limited guidance by US tax authorities regarding taxation of virtual currency activities, taxpayers with such holdings may find themselves in uncharted territory as to whether to take positions that are contrary to IRS pronouncements. This article explores relevant notices, rulings and FAQs, and reviews the types of deference that courts tend to put on...
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Despite NOL Carrybacks, IRS Continues to Deny Refunds of Section 965 Transition Tax Overpayments
By McDermott Will & Emery on Apr 29, 2020
Posted In Tax Refunds, Uncategorized
In a series of frequently asked questions (FAQs) addressing the interaction of recently enacted net operating loss (NOL) carryback provisions and section 965, the IRS stated that taxpayers may not receive a refund of any section 965 tax payment unless and until the payment exceeds the “entire income tax liability for section 965.” The IRS...
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IRS Postpones Virtually All Deadlines Until July 15, 2020, in Response to COVID-19
By Brian Moore, Carlyn S. McCaffrey, McDermott Will & Emery and McDermott Will & Emery on Apr 10, 2020
Posted In IRS Guidance, Tax Refunds, Uncategorized
In Notice 2020-23, the Internal Revenue Service further expanded relief for taxpayers in response to the Coronavirus (COVID-19) pandemic. Individuals, corporations, trusts, estates and other taxpayers that ordinarily would have had a filing, payment or other deadline between April 1, 2020, and July 15, 2020, now qualify for an extension. Access the full article.
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IRS to Temporarily Adjust Operations and Key Compliance Functions
By McDermott Will & Emery and McDermott Will & Emery on Mar 26, 2020
Posted In IRS Guidance, Tax Refunds, Uncategorized
On March 25, 2020, the Internal Revenue Service (IRS) announced a new People First Initiative designed to provide relief to taxpayers on a variety of issues ranging from easing payment guidelines to postponing compliance actions in light of the challenges caused by the Coronavirus (COVID-19) pandemic. The initiative’s projected start date is April 1, 2020, and it...
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