The US Internal Revenue Service is currently accepting comments regarding the applicability of rules that govern reporting of so-called “Specified Foreign Financial Accounts” to virtual currencies (the agency’s preferred term for bitcoin et al). The rules governing the current reporting requirements, which replaced temporary rules in place since 2011, were released last December in Internal…
One of the most important decisions faced by an entrepreneur with a growing business is when to start hiring outside help. Carefully selected and trained employees can be an invaluable asset to the business, returning many times their own cost in sales or productivity gains. On the other hand, the wrong people (or the right…
If you have ever read a John Grisham book or seen a legal or police procedural drama on television, then you have likely heard of the attorney-client privilege. Attorneys need honest and open dialogue with clients in order to craft an effective legal defense. Attorney-client privilege encourages trust between attorneys and clients by protecting consultations…
Another new year brings another tax filing season. While digital currencies didn’t replicate the banner year that they enjoyed in 2013, I like to think that both the community and the supporting infrastructure matured enough in the last year that bitcoin might actually still be a thing five years from now. However, that also means…
What if you don’t report all of your bitcoin gains on your US tax return? You must have at least considered it by now. How would the IRS know? I get this question from clients at least as often as I see it in print. It is a tempting proposition: last year, US taxpayers had…
The New York Department of Financial Services announced revisions to proposed rules for virtual currencies in that state. The revised rules, which came in response to public comments, represent a small but important victory for digital currency advocates. Here is a summary of the changes. These points aren’t really changes, per se, but confusing points…
The IRS classification of bitcoin and other so-called “virtual currencies” as property under the US Internal Revenue Code earlier this year created a variety of unanticipated and potentially undesirable consequences. Since many states incorporate the US Internal Revenue Code by reference, bitcoin’s classification as property at the federal level trickles down to the state level….
The rise and persistence of bitcoin and other digital currencies has led many to wonder whether funds in tax deferred retirement accounts can be used to make investments in them. In fact, they can. There are a few different ways to incorporate digital currencies into a retirement portfolio, but also several very important restrictions. The…
I have noticed that a lot of readers come across this site incidentally or in the process of doing research. If you are new to digital currencies, here are a few recently updated bitcoin guides and other resources that will help you on your way. Bitcoin IRS Tax Guide For Individuals Filers Investopedia’s Bitcoin IRS…
The Securities and Exchange Commission has reportedly sent letters of inquiry to numerous companies in the US digital currency community in recent weeks. The letters, an example of which can be seen here, seem to be part of a general effort to identify and crack down on companies believed to be selling unregistered securities or…
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