Webcast

"Virtual Currency" in a Real Tax World: Tax Implications for Buying, Selling, and Using Virtual Currencies

Streams live on Friday, December 06, 2019 at 01:00pm EST

Taught by
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Course Information

Time 60 Minutes
Difficulty Beginner

Course Description

"Virtual currency" (e.g., Bitcoin, Ethereum, Litecoin) has become increasingly popular in today's economy. This development has invited increased IRS scrutiny of taxpayers that engage in various types of transactions utilizing this (relatively) new manner of exchange. Most recently in 2019, the IRS announced that it had begun to send letters to taxpayers involved in virtual currency transactions regarding the potential failure to report to such transactions properly and failure to pay the appropriate tax incurred as a result of such transactions. IRS Commissioner Chuck Rettig stated that "taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties." Rettig continued by saying, "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."

Given the heightened focus of the IRS on virtual currency transactions, it is extremely important that taxpayers and their tax advisors understand the tax implications associated with buying, selling, and otherwise using virtual currencies, including the IRS' position regarding the appropriate tax treatment and reporting related to such transactions. This course, presented by J. Troy Terakedis, co-chair of Dickinson Wright's Tax Practice Group, will discuss these tax implications as well as address the various guidance that has been issued by the IRS which shed some light on how the IRS will treat virtual currency from a tax perspective.


Learning Objectives:

  1. Review IRS guidance regarding the appropriate tax treatment of virtual currency as set forth in IR Notice 2014-21
  2. Assess IRS treatment of the purchase and sale of virtual currency
  3. Analyze IRS treatment when virtual currency is used to pay for goods and services
  4. Comply with tax reporting requirements in light of IR-2019-132
  5. Discuss remedies for noncompliance

Credit Information

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Faculty

Troy Terakedis

Dickinson Wright

Acknowledgements

  • Listed in Best Lawyers in America, 2009-present
    • Tax Law - "Lawyer of the Year 2017"
    • Estate Planning
  • Listed in Ohio Super Lawyers, 2013-present
    • Tax
  • Listed in Ohio Super Lawyers, Rising Stars, 2005-2007
    • Tax
  • AV Preeminent Rated by Martindale Hubbell™
  • Columbus Business First “Forty under 40”, Class of 2009


Prominent Assignments

Tax, corporate and general business counsel for companies in the technology, real estate, charter school management, manufacturing, distribution, retail, financial, insurance, legal, healthcare and other industries.

Advise closely-held and public companies in connection with federal income tax and other issues in structuring tax-free and taxable transactions including mergers, divestures, spin-offs, split-offs, asset sales and equity rollovers.

Assist companies and their owners in structuring and implementing employee stock ownership plans (ESOP) in connection with the sale of company stock to the ESOP, including advising with respect to deferral of gain recognition under IRC Section 104L2.

Counsel to closely-held companies regarding choice of entity and other structuring considerations.

Counsel to private equity funds regarding fund formation and tax-related matters, with an emphasis on federal partnership tax issues.

Advise both U.S. and foreign companies on cross-border merger, acquisitions, divestitures and other structuring issues. 

Advise clients in connection with the formation of IC-DISCs, IRC Section 1031 exchanges, and other efficient income tax strategies.

Counsel companies on federal income tax and business matters related to the design and implementation of equity and similar compensation arrangements including partnership “profits interest” plans, stock option plans, phantom stock plans, stock appreciation rights, and other nonqualified deferred compensation programs.

Counsel to officers and directors of Fortune 500 companies, principals of private equity funds, owners of closely-held businesses and other high net worth individuals and executives on federal income tax, business succession planning, and estate and gift tax planning matters, including the formation of family limited partnerships and limited liability companies, grantor retained annuity trusts, sales to defective grantor trusts, qualified personal residence trusts, life insurance strategies, formation and funding of family foundations, charitable lead and remainder trusts, and other sophisticated wealth transfer and asset protection strategies.


Publications/Presentations

  • “Taxation of Partnerships and Flow-Through Entities”, The 57th Annual Cleveland Tax Institute, Cleveland Metropolitan Bar Association, Cleveland, Ohio, December 3, 2014
  • “Purchase, Sale, Exchange, and Retirement of Partnership and LLC Interests”, Choosing the Best Business Entity for your Client’s New Business, Sterling Education Services, Inc., Cleveland, Ohio, May 16, 2012
  • “M&A for Small Businesses – Buyer’s Side”, Columbus Bar Association, Columbus, Ohio, April 11, 2012
  • “Demystifying the Complexity of Section 704(b) Allocations and the Passive Loss Rules”, 2009 Mega Tax Conference, Ohio Society of CPAs, Columbus, Ohio, December 2, 2009
  • “Section 83 and Taxation of Compensatory Partnership Interests”, Taxing Matters, Columbus Bar Association, Columbus, Ohio, December 13, 2006