The American Institute of CPAs has requested additional guidance to help taxpayers in calculating losses on digital assets.
The AICPA is asking the Internal Revenue Service to provide guidance on how such losses are handled in different scenarios. The organization has asked for the following questions to be addressed:
*What facts indicate worthlessness of a digital asset? *What facts indicate abandonment of a digital asset? *When, if ever, might digital assets be securities for tax purposes? *Theft of a digital asset held for investment. Does the Ponzi loss guidance of Rev. Rul. 2009-9 and Rev. Proc. 2009-20 apply beyond Ponzi-losses to other fraudulent arrangements, including digital asset losses from certain digital asset exchange activities? *What is the tax effect of lending digital assets? (Some people may find themselves in this position with some bankrupt exchanges.) *When would section 1234A apply to termination of a digital asset? *How should a taxpayer report digital asset activity if they are unable to access their records due to bankruptcy of an exchange? *Is a digital asset considered disposed of by transferring the investor’s interest in a bankruptcy proceeding? Must there be proof of transfer of the underlying digital asset?
