AICPA Comments on Notice 2014-21_ Virtual Currency Guidance _ Internal Revenue Service _ Currency bitcoin wiki

June 10, 2016 internal revenue service attn: CC:PA:LPD:PR (notice 2014-21) room 5203 P.O. Box 7604 ben franklin station washington, DC 20044 re: comments on notice 2014-21: virtual currency guidance dear sir or madam: the american institute of cpas (AICPA) submits the following comments in response to the internal revenue service (IRS) guidance on how existing general tax principles apply to transactions us ing virtual currency. The recommendations included in this letter we re developed by the AICPA individual self employed tax technical resource panel (TRP) and approved by the AICPA tax executive committee. We applaud the IRS for working expeditiously to release guidance in the form of answers to frequently asked questions (faqs) regarding the tax treatment of virtual currency transactions, an area that has quickly grown and become a prevalent concern for many taxpayers and tax practit ioners.Bitcoin wiki

however, we recognize there are a few major issues, not addressed in notice 2014-21, that may arise as virtual currency continues to expand and gain additional popularity in the marketplace. The AICPA encourages the IRS to release additional, much needed, guidance on virtual currency. Specifically, we request further guidance on the following items:

(e.G., first in first out (FIFO)). The treatment of convertible virtual currency as non-cash property means that any time virtual currency is used to acquire goods or services, a barter transaction takes place, and the parties need to know the fair market value (FMV) of the currency on that day. The party exchanging the virtual currency for the goods or services will need to also track the basis of all of his or her currency to determine if a gain or loss has occurred and whether it is a short-term or long-term transaction.Bitcoin wiki this determination involves a significant amount of recordkeeping, even if the transaction is valued at under $10. Currently, there are no alternative tracking methods provided for such transactions (other than f or securities under treas. Reg. § 1.1012-1(c)). Therefore, taxpayers are required to specifically identify which virtual currency lot was used for each transaction in order to properly determine the gain or loss for that particular tra nsaction. In many cases, it is impossible for a taxpayer to track which specific virtual currency was used for a particular transaction.

June 10, 2016 internal revenue service attn: CC:PA:LPD:PR (notice 2014-21) room 5203 P.O. Box 7604 ben franklin station washington, DC 20044 re: comments on notice 2014-21: virtual currency guidance dear sir or madam: the american institute of cpas (AICPA) submits the following comments in response to the internal revenue service (IRS) guidance on how existing general tax principles apply to transactions us ing virtual currency.Bitcoin wiki the recommendations included in this letter we re developed by the AICPA individual self employed tax technical resource panel (TRP) and approved by the AICPA tax executive committee. We applaud the IRS for working expeditiously to release guidance in the form of answers to frequently asked questions (faqs) regarding the tax treatment of virtual currency transactions, an area that has quickly grown and become a prevalent concern for many taxpayers and tax practit ioners. However, we recognize there are a few major issues, not addressed in notice 2014-21, that may arise as virtual currency continues to expand and gain additional popularity in the marketplace. The AICPA encourages the IRS to release additional, much needed, guidance on virtual currency. Specifically, we request further guidance on the following items:

bitcoin wiki

(e.G., first in first out (FIFO)). The treatment of convertible virtual currency as non-cash property means that any time virtual currency is used to acquire goods or services, a barter transaction takes place, and the parties need to know the fair market value (FMV) of the currency on that day. The party exchanging the virtual currency for the goods or services will need to also track the basis of all of his or her currency to determine if a gain or loss has occurred and whether it is a short-term or long-term transaction. This determination involves a significant amount of recordkeeping, even if the transaction is valued at under $10. Currently, there are no alternative tracking methods provided for such transactions (other than f or securities under treas. Reg. § 1.1012-1(c)). Therefore, taxpayers are required to specifically identify which virtual currency lot was used for each transaction in order to properly determine the gain or loss for that particular tra nsaction.Bitcoin wiki in many cases, it is impossible for a taxpayer to track which specific virtual currency was used for a particular transaction.