The Biden Administration would extend the mark-to-market election to actively traded digital assets, derivatives on actively traded digital assets, and hedges of those digital assets. Sections 475(e) and 475(f) allow commodities dealers and securities traders to mark-to-market their commodities and securities and treat the gains and losses as ordinary gain or loss. Apply the Mark-to-Market Rules to Digital Asset Dealers and Traders The proposals would be effective for taxable years beginning after December 31, 2022. In addition, the proposal would require a lender to include in gross income amounts that would have been included had the lender not loaned the digital asset (i.e., “substitute payments”). The Secretary would also have the authority to define “actively traded” and extend section 1058 to “non-actively traded” digital assets. The Biden Administration’s proposal would expand section 1058 to apply to “actively traded digital assets” recorded on cryptographically secured distributed ledgers, so long as the loan agreement contains similar terms to those currently required for loans of securities. Under current law, securities loans that satisfy certain requirements are tax-free under section 1058. ![]() Apply Securities Loan Rules to Digital Assets The proposals do not change the current treatment of cryptocurrency as property for federal income tax purposes, and do not address any of the fundamental tax issues that cryptocurrency raise. ![]() On March 28, 2022, the Biden Administration proposed certain very limited changes to the taxation of cryptocurrency transactions.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |