Cryptocurrency is also referred to as a digital asset. It’s an asset that becomes taxable once it’s sold or exchanged. Like capital gains, it has to be properly reported to the Internal Revenue Service (IRS). Tax officials are going through their own learning curve on all that is involved with crypto, but they are becoming increasingly active in investigating the firms that make an extensive use of crypto. The failure to be in compliance can result in steep penalties.

Charitable giving with digital assets is one example. The increased use of this currency form means that more and more non-profits are looking to be able to take contributions in this way. Current tax law has not yet fully caught up to all the implications this has for both the giver and the recipient. The fact that cryptocurrency doesn’t have actual value until cashed in leaves unanswered questions from the tax perspective.

Unanswered questions are not what anyone is looking for, particularly when the IRS gets to be the one answering the questions — even though they may be as adrift as the people they are questioning. An experienced Miami crypto tax attorney can be particularly valuable in an otherwise uncertain landscape.

More new ground comes with the management of digital assets and what it means for tax expectations. Cryptocurrencies are being used as an investment vehicle, and tax rules are still very much a gray area. Good legal counsel can help both companies and individuals proceed with sufficient caution, while still making the most of the opportunities that are presented.

The tax issues discussed to this point only scratch the surface, and that doesn’t even cover how crypto may or may not be handled at the state level. To date, the state of Florida has not issued formal guidance on the tax treatment of crypto. If this currency keeps growing in usage, that will likely change. Both individuals and companies need to know that an experienced Miami crypto tax lawyer will be alert to changes as they develop.