Do you need tax help from a CPA or Tax Attorney and can they provide you any tax relief? Everyone needs to find a tax adviser who will get to know them and their personal tax situations. This relationship allows a tax professional to form a reasonable basis to argue your specific set of circumstances using current regulations in the internal revenue code instead of relying on the IRS’ interpretation of the regulations when they issue guidance such as Revenue Ruling 2019-24, and IRS Notice 2014-21 on Cryptocurrencies such as Bitcoin/Ethereum/Ripple/Flare(spark).
These tax positions have the possibility to save a taxpayer a tremendous amount of tax and/or avoid hefty penalties from not disclosing their transactions, which I talk about at length in the above YouTube Video.
I hope you find the video helpful! If you did please LIKE the video above, share it (Sharing helps me A LOT- thank you to those who do!) and subscribe for more content! Thanks again for watching!
00:00 Is an Airdrop Taxed?- It depends
04:09 Why you need a CPA or Tax Lawyer
05:00 Contradictions in Revenue Rulings to IRC
08:50 Whats the purpose of Revenue Rulings?
10:08 Can you rely on the Ruling?
11:40 Talk to a professional
14:12 Reasonable Basis Criteria
15:00 How it works & saves tax & penalties
18:39 Why CPA & Attorney not EA?
19:00 CPA vs EA
21:46 Most Accountants are Lazy & Afraid
22:48 Why the argument is necessary
Example In video:
Per the IRS Revenue Rulings, that outline a certain fact pattern, they indeed are to be treated as Ordinary Income. Which means when an airdrop of a coin, is received, and individuals have access to markets and the ability to sell it, a taxpayer would report Ordinary Income to the extent of the Fair Market Value on the date received.
So, let’s say the coins FMV when we gain control is $2,000,000
But later on, in the year the coin drops to $1 (or has a major decline) and you panic sell?
You have a 2,000,000 ordinary income less a 3,000 STCL,
So, your taxable income is $1,997,000
Which in 2021 is a total tax payable of around $700,000
and a $1,997,000 Short Term Capital Loss Carryover you can deduct fully in Six Hundred and Sixty-Six Years If you have no other Short Term Capital Gains in your future. (Yup, that’s evil — the math even knows it.)