Insights

Blockchain and Tax

Blockchain and Tax: Navigating Uncertainty

Virtual currencies (often called cryptocurrencies) such as bitcoin are perhaps blockchain's best-known application. As these and other blockchain-based digital assets become more common, and attract more regulatory and legislative attention, it will be crucial to keep up with the latest guidance—particularly given the often counterintuitive consequences of transacting with cryptocurrency for tax purposes. Since current tax law is limited to a single statement of sub-regulatory guidance published in 2014, however, taxpayers presently have more questions than answers.

This Jones Day White Paper will discuss briefly the technical and legal background of blockchain technology and cryptocurrencies, highlight key issues under the current (limited) tax regime for cryptocurrencies, and identify selected open issues that are creating some of the most uncertainty for taxpayers.

Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our “Contact Us” form, which can be found on our website at www.jonesday.com. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.

 
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