Attorney: IRS Rules May Treat Bitcoin Loans As Salesbr>
A San Francisco tax attorney is claiming the US Internal Revenue Service (IRS) is using tracking software to monitor cryptocurrency exchanges for user personal information and transaction histories.
Writing in Forbes, attorney Robert W. Wood claimed that the IRS is looking for new ways to tax, and believes that loans made in bitcoins may come under scrutiny. The IRS is currently locked up with Coinbase, the largest US exchange, in a battle over customer records and tax reporting.
Because the IRS rules on taxes and cryptocurrency trading are murky, any loans of bitcoins may be treated as a sale by the IRS for tax purposes. Wood concludes: “In the current climate of uncertainty, careful documentation might help. Emphasize that the transaction is intended to be a loan, not a sale or disposition. The loan documentation could emphasize that repayment should be made in digital currency that is identical in value and denomination to the digital currency lent.”