Cryptocurrency has grown from a niche digital curiosity to a mainstream financial instrument. With the surge in popularity and the increase in transactions involving cryptocurrencies, the IRS has intensified its focus on ensuring proper tax reporting. They have also over-corrected with guidance and rules
On March 25, 2024, the IRS issued proposed regulations (REG-108761-22) which, if finalized, would identify certain CRATs as listed transactions. For those unaware of the listed transaction rules, such a designation would mean that taxpayers and material advisors who participated in these CRATs would have to comply with lengthy disclosure statements or risk
Intellectual property (“IP”) is typically monetized either by sale or (royalty generating) license agreements. The Code[1] often allows sales to be taxed at preferential capital gains rates[2] while simple royalties are ordinary income.[3] At present the maximum capital gain versus ordinary income rate differential for non-corporate taxpayers – without more[4] –
In addition to being developed in-house, intellectual property (“IP”) can obviously be acquired from third parties. IP acquisitions may be more germane now than in the recent past as developers race to create and monetize artificial intelligence (“AI”) tools. But, while AI platforms might be the shiniest and most interesting objects in the current IP
Intellectual property (“IP”) is hugely important to businesses. Given that importance, IP owners must occasionally litigate against the unauthorized use of their technology. The costs of such litigation and appurtenant settlements implicate a host of federal income tax issues. Some IP litigants do not consider those tax issues at all, while others aggressively overplay their
As the price of bitcoin rises, it is dominating the discussion regarding the future of cryptocurrencies, other digital assets and blockchain technology. Although the bitcoin price is a good thing, there is much more to be excited about regarding blockchain technology and digital assets in 2024.
Gray Reed Partner Joshua Smeltzer, who co-leads the
On June 30, 2023 the District Court in the Northern District of California granted a petition to enforce the cryptocurrency exchange Kraken to release customer information. Specifically, Kraken was ordered to produce the name, date of birth, taxpayer identification number, physical address, telephone number, and email addresses for customers having at least $20,000 of transactions
The Internal Revenue Service’s proposed classification of non-fungible tokens (NFTs) as digital assets has raised concerns in the blockchain industry and among stakeholders. While these tokens are unique, the IRS’s broad categorization of NFTs as securities has led to calls for clearer regulations, especially as NFTs can also be collectibles. Industry experts seek clarification on
The U.S. Treasury Department faces a complex task in enforcing its proposed digital asset reporting rules on foreign trading platforms. The regulations, introduced in late August, primarily address domestic transactions, leaving potential difficulties in enforcing reporting requirements on foreign digital asset brokers, especially those operating cryptocurrency trading platforms.
One potential avenue for the Treasury to
On September 8, 2023, the IRS announced a multitude of compliance initiatives aimed at high-income taxpayers, partnerships, digital assets, FBARs and labor brokers. According to the announcement, the IRS has finalized its “top-to-bottom review” of current enforcement efforts and intends to zero in on these matters in the near future. As expected, the impetus for change—according to the announcement—was Congress’s decision to provide the IRS with additional funding through its passage of the Inflation Reduction Act (IRA).