Long-Awaited IRS Cryptocurrency Guidance on the Way– May 31, 2019 by Cynthia Pedersen

Pursuant to statements made by IRS Commissioner Charles Rettig on May 30, 2019, much-anticipated cryptocurrency tax guidance should be released “very soon.” Rettig suggested the guidance, which would come in the form of a revenue ruling and a revenue procedure, could be released within the next 30 days.
These statements come in the tailwind of Rettig’s May 16 letter responding to a request from 21 representatives in Congress urging the IRS to provide guidance on basic reporting. In that letter, Rettig assured the representatives that the soon-to-be-released guidance will address, among other issues: 

  1. Acceptable methods for calculating cost basis;
  2. Acceptable methods of cost basis assignment; and
  3. Tax treatment of forks 

This welcome guidance should build upon the only previous tax guidance available, IRS Notice 2014-21, which states that “virtual currency is treated as property and existing tax principles applicable to property transactions should apply.”
Stay tuned for more on this highly anticipated guidance.
Please contact a member of your service team, or contact Cynthia Pedersen at cpedersen@cohencpa.com for further discussion. 

Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.