Next topic is calculating fair market value. Wang of the AICPA said she recommends the IRS set out some specific guidance on how to calculate FMV (and referenced @coindesk's Bitcoin Price Index in the process) #IRScrypto
There needs to be some guidance around what a qualfied appraiser is or looks like, Wang says #IRScrypto
Say you're donating 1 BTC. It's > $5,000 so you'd maybe need an appraiser but why not just average the price on some exchanges, an audience member asks #IRScrypto
Treating it as a security (under this circumstance?) might solve for that but OTOH some taxpayers have had issues here as well, Meisler said (I didn't entirely understand that last bit, tbh) #IRScrypto
[Ed note: this stuff is complicated]
AICPA is recommending a safe harbor for chain split coins and airdrops which occurred prior to Oct 2019, allowing taxpayers to amend past filings as needed for this kind of situation #IRScrypto
An audience member was talking about using APIs, another asked "what is an API," the first said "it's an application programming interface" and look I'm injecting my opinion here but that doesn't necessarily answer the question. #IRScrypto
Anyways got another 15 minute break before the last panel. Back shortly
All right folks one panel left. We're going to close on regulatory guidance, ft. Brendan O'Dell (IRS), Lisa Zarlenga (@SteptoeLLP, but listed as @ABAesq), Liz Chien (@Ripple) and Candace Ewell (@PwC) #IRScrypto
In response to a request from O'Dell, Chien explains "XRP is the digital asset most closely associated with Ripple." #IRScrypto
We're starting with classification of crypto. Chien says "it'll be really interesting to understand what are the limits of the IRS's authority to promulgate guidance and what'll need legislative action." #IRScrypto
There are a lot of questions around classification and right now the guidance is focused on 'convertible virtual currency' but this is only a piece of the space, Zarlenga says #IRScrypto
Zarlenga says there are really 3 types of crypto: CVCs, utility tokens and security/asset tokens #IRScrypto
Notice 2014-21 (ie the 2014 guidance) says crypto is property for tax purposes but doesn't say what kind of property (commodity vs tangible vs intangible vs etc), Zarlenga says #IRScrypto
These definitions are important for reporting purposes, the panelsts all collectively agree #IRScrypto
Is this a regulatory fix or does it need legislative action, asks Coinbase tax VP #IRScrypto
Ewell says the IRS' authority is pretty broad when it comes to defining what things are for reporting purposes #IRScrypto
Would a good first step be a sort of limited 1099-B that just focuses on gross proceeds reporting, asks an audience member #IRScrypto
Everyone has to understand the limits of that number, but even then you're only reporting cash transactions, not all transactions (ie crypto-to-crypto might not fall into that category) Ewell says #IRScrypto
If you're a security you fall under one bucket, if you're goods and services you fall under another bucket and that brings us full circle to classification, Chien says #IRScrypto
This is important for ICOs -- if they're stock that's one classification, if they're income that's another, Zarlenga says [paraphrased] #IRScrypto
O'Dell of the IRS asks the panelists how they're currently digging into these issues. Zarlenga says there's a lot of digging into old law #IRScrypto
Lending is one example. Zarlenga says lending of securities isn't taxable but CVCs might not fall into that category. Prior to fork guidance coming out there were people looking at analogies such as I think she said stock dividends into /cows/? #IRScrypto
"Any guidance you can issue would be fantastic because then maybe I wouldn't have to get three opinions on something," Chien says #IRScrypto
Audience member comments on the evolution of assets, likening that to pennies: "The copper in pennies became worth more than the penny so what was a currency transaction became a minerals" trade. $DOGE started as a joke and became a currency, he said #IRScrypto
Reporting on a 1099 comes back to the nature of the transaction, Ewell says in response to another question about whether 1099-Bs or 1099-Ks are right #IRScrypto
Audience member says the IRS might consider common-sense guidelines for reporting, referencing microtransactions and the outdated $10k limit currently seen #IRScrypto
(My laptop died so tweets might slow a little)
Zarlenga brings up central bank digital currencies. These weren't even a thing when the 2014 guidance was published, but now it's something to consider when looking at whether crypto is property. #IRScrypto
What's the difference between a stablecoin and a security or utility coin, asks audience member #IRScrypto
Zarlenga says the implication of the FAQs is that miners are receiving income re: PoW. Q is how do you classify staking rewards? It might look more like a dividend award #IrshadeBariTalla
Several audience members are basically trying to talk through what interest on a stablecoin or other token might be when they're not considered currency #IRScrypto
Moving on to the 2019 guidance.... #IRScrypto
Crypto specific issues ie hard forks, which the IRS addressed in the 2019 guidance. Zarlenga is defining hard forks first, differentiating between contentious and non contentious forks #IRScrypto
Non contentious forks aren't really addressed in the recent guidance, Zarlenga says ("I kind of view it more as a spoon than a fork"), but the revenue ruling really only seems to address contentious hard forks #IRScrypto
The revenue ruling seems to conflate airdrops and contentious hard forks, Zarlenga says #IRScrypto
Btw revenue ruling refers to 2019 guidance here #IRScrypto
Zarlenga says she doesn't think anyone really has dominion and control when you're on the verge of a hard fork because you're waiting for exchanges to announce their support #IRScrypto
Ewell said she doesn't know what her tax reporting requirements would be when it comes to an airdrop #IRScrypto
We're now talking FATCA.(I really briefly mentioned that in this: coindesk.com/irs-refused-to…)
And this fourth panel has ended. Closing comments now #IRScrypto
That was pretty brief actually, today's summit has ended. Write up to come, thanks for following along ya'll #IRScrypto
@threadreaderapp unroll plz and thank
