K&L Gates Discusses Tax-Free Cryptocurrency Transactions and Reporting Obligations

As cryptocurrencies such as Bitcoin and Ethereum become more prevalent in investment circles
and acceptable for commercial transactions, the United States Internal Revenue Service (“IRS”)
has said little other than to label “virtual currencies” as property and state that transactions
involving virtual currencies may be subject to taxation under generally applicable law. 1
However, on September 7, the United States Congressional Blockchain Caucus 2 (the “Caucus”)
introduced the Cryptocurrency Tax Fairness Act (the “Act”), which would exempt certain
cryptocurrency transactions and create a cryptocurrency-specific information reporting
requirement.

The Cryptocurrency Tax Fairness Act

Under the Act, gross income would not include … Read more

K&L Gates Discusses Tax-Free Cryptocurrency Transactions and Reporting Rules

As cryptocurrencies such as Bitcoin and Ethereum become more prevalent in investment circles and acceptable for commercial transactions, the United States Internal Revenue Service (“IRS”) has said little other than to label “virtual currencies” as property and state that transactions involving virtual currencies may be subject to taxation under generally applicable law.[1] However, on September 7, the United States Congressional Blockchain Caucus[2] (the “Caucus”) introduced the Cryptocurrency Tax Fairness Act (the “Act”), which would exempt certain cryptocurrency transactions and create a cryptocurrency-specific information reporting requirement.

The Cryptocurrency Tax Fairness Act

Under the … Read more

K&L Gates Discusses the Border Adjustment Tax

The House Republicans have proposed sweeping changes to the U.S. tax system, specifically that income from the export of goods, services and intangibles will not be subject to federal income tax, and that the cost of such imports into the U.S. will not be deductible. By incentivising exports and deterring imports, the proposed “Border Adjustment Tax” (BAT) is intended to increase domestic production, strengthen the U.S. economy and create new jobs, and deter corporate inversions and erosion of the U.S. tax base. It also is estimated to pay for approximately one-third of the cost of the Republicans’ comprehensive tax reform … Read more

K&L Gates Discusses the Border Adjustment Tax

Thanks to the Republican sweep of the White House and the Congress, all the talk in recent years about tax reform is on the verge of turning into action.  What many dismissed as idle chatter before Election Day suddenly became very real as the prospect of passing tax reform by using the budget reconciliation mechanism requiring only 51 votes in the Senate turned from a pipedream into reality.  But, with so many tax reform options on the table, how do you know what to focus on?   What ideas are worth explaining to the C Suite, running diagnostics, and spending resources … Read more