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. 
 

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