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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Wednesday, January 15, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This webinar will point out and explain the relevant concepts, common scenarios, and application of loss limitation rules.

Faculty

Mark DiMichael
Partner, Digital Asset Practice Leader
Citrin Cooperman & Co.

Mr. DiMichael is a partner in the forensic, litigation, and valuation services department. He is also the co-founder and co-leader of the firm's Digital Asset Committee, focusing on addressing the unique needs of Citrin Cooperman clients in the digital asset space.

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Matthew E. Foreman
Partner, Co-Chair Taxation Practice Group
Falcon Rappaport & Berkman LLP

Mr. Foreman co-chairs FRB’s Taxation Practice Group and advises businesses on the tax effects of a variety of corporate transactions, including taxable and tax-free reorganizations, mergers, sales, and acquisitions. He designs and implements tax-efficient structures for U.S.-based businesses to expand abroad and invest in foreign joint ventures. Mr. Foreman drafts tax memoranda and opinions on a variety of subjects, including tax-free reorganizations, tax-efficient return of capital to owners, Qualified Small Business stock, and various state pass-through entity taxes. He defends clients from audits from the IRS and various state tax agencies, including appealing audit determinations. Mr. Foreman advises clients on a variety of tax issues related to cryptocurrencies, including initial coin offerings (ICOs), taxability of staking and air drops, and the imposition of Sales and Use taxes on the issuance of non-fungible tokens (NFTs). He drafts tax portions of Operating and Shareholder Agreements for businesses in different industries. Mr. Foreman has extensive experience in a variety of SALT issues, especially New York State residency audits and state Sales and Use tax nexus issues post-Wayfair.

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Description

Digital assets are a broad and complex concept. The rise in popularity of these assets, has led to increased losses and types of losses created by selling, exchanging, simply holding these assets, and other activities. Selling or exchanging digital assets could create capital or ordinary loss deductions depending on the cause of the loss. Certain types of losses may not be deductible at all.

In addition to commonly encountered scenarios, digital losses could arise from lost keys, transfers to incorrect digital addresses, theft, or investment schemes. The rules concerning deducting worthless and abandoned assets have always been problematic for tax practitioners. The IRS Office of Chief Counsel recently released Memorandum Number 202302011 explaining when a taxpayer could deduct worthless or abandoned digital assets. Of course, as an advice memorandum, it includes the caveat, "This document should not be used or cited as precedent." The memorandum also references the Section 165 "closed and completed transactions" requirement, which is a complicated issue for assets that may no longer have a liquid market. Tax professionals working with individuals and businesses holding digital assets need to understand the guidelines pertaining to deducting losses from holding these assets.

Listen as our panel of digital reporting experts reviews the most current rules for deducting losses relative to holding digital assets.

Outline

  1. Accounting for losses (and gains)
  2. New reporting requirements for digital asset brokers
  3. Revenue Procedure 2024-28
  4. Digital losses
    • Sales and exchanges
    • Lost keys
    • Investment scams
    • Deposit losses
    • Worthlessness and abandoned assets
  5. Reporting losses
    • Investment losses
    • Casualty losses
  6. Loss limitations
    • Section 469 passive losses
    • Section 461(l) excess business losses

Benefits

The panel will cover these and other critical issues:

  • Applying the safe harbor under Revenue Procedure 2024-28 when tracking basis in digital assets
  • The final regulations on broker reporting requirements for digital assets
  • The requirements for deducting losses from worthless or abandoned digital assets
  • Tax reporting and deductions for digital asset theft and casualty loss reporting
  • How loss limitations under Section 469 and 461(l) impact digital losses

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify many types of digital assets
  • Determine the requirements for deducting worthless digital assets
  • Decide the tax implications of lot keys and investment scams relative to digital assets
  • Ascertain how Rev Proc 2024-28 safe harbor for determining basis is applied

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).