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The income tax results of digitally mining bitcoin and physically mining gold are significantly different. This article compares and contrasts the tax treatment of these two types of mining operations.
Treasury takes a more aggressive stance on reporting of virtual currency transactions.
This index lists items included in the print issues of The Tax Adviser published from January through December 2020.
C CORPORATIONS Company’s processed marine seismic data is not qualifying production property under former Sec. 199 The Tax Court held that a company’s processed marine seismic data is not qualifying production property within the meaning of former Sec. 199(c)(5) because it is neither tangible personal property nor a sound recording.
The IRS issued its top 12 “Dirty Dozen” tax scams, warning people to be vigilant to avoid these schemes all year round. New to the list is the “offer in compromise mills.”
Gamers who, as part of a video game, transact in virtual currencies that do not leave the video game environment do not have to report the transactions on a tax return, the IRS made clear in a statement released on its website.
Members of Congress have introduced a bill that would provide a de minimis exemption for personal transactions where the gains are less than or equal to $200.
This semiannual update of recent developments in the area of individual taxation includes cases on hobby losses, innocent-spouse relief, material participation in a business, discharge of indebtedness, and self-employment tax, as well as IRS guidance on charitable deductions, cryptocurrency, and other topics.
A recognizable transaction for tax purposes occurs any time virtual currency is exchanged for cash or used to purchase goods. Basis tracking is key to properly reporting gains and losses.
INDIVIDUALS Taxpayer entitled to head-of-household status The Tax Court held that an unmarried taxpayer who lived with her three children and the father of the children was entitled to file as a head of household for 2015 and 2016 because she met all the requirements. However, the court concluded the
Gamers who, as part of a video game, transact in virtual currencies that do not leave the video game environment do not have to report the transactions on a tax return, the IRS made clear in a statement released on its website.
FAQs advise taxpayers to maintain records documenting receipts, sales, exchanges, or other dispositions of virtual currency and the fair market value of the virtual currency.
The IRS ruled that a taxpayer does not have gross income as a result of a hard fork of a cryptocurrency if the taxpayer does not receive units of a new cryptocurrency, but does have gross income as a result of an airdrop of new cryptocurrency after a hard fork if the taxpayer receives units of the new cryptocurrency.
CORPORATIONS California medical marijuana dispensary barred from taking deductions The Tax Court rejected a medical marijuana dispensary’s constitutional challenge to Sec. 280E, which disallows deductions for a business that consists of trafficking in a controlled substance within the meaning of the Controlled Substances Act. The dispensary, legally operating under California
Tax document summaries for the week of Oct. 7–11, 2019, covering individuals, IRS procedure, partnerships, and more.
The IRS ruled that a taxpayer does not have gross income as a result of a hard fork of a cryptocurrency if the taxpayer does not receive units of a new cryptocurrency, but does have gross income as a result of an airdrop of new cryptocurrency after a hard fork if the taxpayer receives units of the new cryptocurrency.
The IRS has begun sending what it calls “educational letters” to taxpayers it has identified as not reporting virtual currency transactions or reporting them incorrectly.
The AICPA Virtual Currency Task Force reached out to Treasury’s Financial Crimes Enforcement Network (FinCEN) to help practitioners answer the question of whether virtual currency (or cryptocurrency) must be reported on FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).
This item discusses some key U.S. tax implications and unanswered questions of cryptocurrencies and identifies possible avenues of relief for taxpayers with unreported income or assets connected to cryptocurrency.
The AICPA sent a letter to the IRS with recommendations for items of tax guidance that should be priorities for the Service to issue from July 1, 2018, to June 30, 2019.
DEDUCTIONS
Business meal deductions after the TCJA
This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.
TAX RELIEF
Quirks spurred by COVID-19 tax relief
This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.