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Deducting Digital Asset Losses: Worthless Assets, Rev Proc 2024-28 Basis Safe Harbor, Theft and Casualty Losses

A live 110-minute CPE webinar with interactive Q&A

This program is included with the Strafford CPE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
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Wednesday, January 15, 2025

1:00pm-2:50pm EST, 10:00am-11:50am PST

Early Registration Discount Deadline, Friday, December 20, 2024

or call 1-800-926-7926
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This webinar will point out and explain the relevant concepts, common scenarios, and application of loss limitation rules.

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.

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Outline

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

Faculty

DiMichael, Mark
Mark DiMichael
Partner, Digital Asset Practice Leader
Citrin Cooperman

Mr. DiMichael is a partner in the forensic, litigation, and valuation services department. He is also the co-founder...  |  Read More

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

Mr. Foreman co-chairs FRB’s Taxation Practice Group and advises businesses on the tax effects of a variety of...  |  Read More

Attend on January 15

Early Discount (through 12/20/24)

CPE credit processing is available for an additional fee of $39.
CPE processing must be ordered prior to the event. See NASBA details.

Cannot Attend January 15?

Early Discount (through 12/20/24)

CPE credit is not available on downloads.

CPE On-Demand

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