Unlock the Secret to Tax-Free Cryptocurrency Holdings

Discover why your accountant may be wrong about crypto taxes – and how IRS rulings prove it.

Why Are You Paying Taxes on Crypto?

Cryptocurrencies aren't taxable like you think. Here's why your accountant could be wrong.

I am the only one who has obtained several dozen determination letters from the IRS agreeing that cryptographic or virtual currency (cryptos) is not taxable. Why is your accountant telling you differently? Why is your accountant even talking about "cryptos" when they are no different than gold or any other property?

What the IRS Really Says About Crypto

IRS Revenue Rulings 2014 & 2019: Cryptos Are Property, Not Currency

Welcome, and thank you for joining today's presentation on an important and evolving topic: the tax implications of cryptographic or virtual currencies. With the rise of cryptocurrencies, many are exploring how these digital assets are treated under federal and state income tax laws. In today's session, we’ll dive into understanding that cryptos may not necessarily be subject to income taxes, backed by IRS rulings and legal interpretations.

Cryptocurrencies, as defined by the IRS in its 2014 and 2019 Revenue Rulings, are treated as property rather than currency for tax purposes. This distinction is crucial because it affects how gains and losses from cryptocurrency transactions are reported. Cryptos are treated just like precious metals because they are both defined as property. No new tax laws have imposed new taxes on cryptocurrency.

When Is Crypto Taxable?

Key Points from IRS Revenue Ruling 2019-24

The IRS Revenue Ruling 2019-24 focuses on situations like hard forks and airdrops, providing guidance on when new cryptocurrency units, created after such events, should be considered taxable. A key point from the ruling is that tax liability arises only when the taxpayer has "dominion and control" over the cryptocurrency (exclusive rights over the private keys), and then actually disposes of the property for dollars.

Common Misconceptions About Crypto and Taxes

Property vs. Currency: Know the Difference

Gross income under Section 61 of the Internal Revenue Code is broadly defined, but cryptocurrencies only fall under this definition if the taxpayer "constructively receives" the currency as an award, reward, or payment for goods or services. This means simply owning cryptocurrencies that increase in value does not immediately result in taxable income.

Hold Your Crypto – Pay No Taxes

Crypto as a Capital Asset

Cryptocurrencies are treated as capital assets, meaning tax liability may only arise if there is a "sale or exchange" of the asset. Holding cryptocurrencies for long-term investment without selling or converting them to fiat currency generally does not result in immediate tax liability.

Stop Paying Too Much in Taxes

Learn how to manage your crypto to reduce Tax liability

Ready to Stop Overpaying on Taxes?