Understanding Taxation of Digital Assets

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Digital assets—from cryptocurrencies to tokenized assets and decentralized finance products—continue to reshape the tax landscape. As adoption grows among individuals, investors, and businesses, tax professionals face increasing pressure to understand evolving IRS rules, reporting requirements, and compliance risks.

This course delivers a clear, practical framework for navigating the taxation of digital assets, including foundational definitions, key IRS and congressional guidance, basis tracking, gain/loss rules, and the new broker reporting regime under Form 1099‑DA. Participants will also learn critical due diligence practices, questions to ask clients, and strategies for ensuring accurate reporting and audit‑ready documentation.

Who Should Attend
Any tax professional who helps clients or their employer with digital asset transactions and proper tax reporting and planning.

Topics Covered

• Timeline of IRS and congressional guidance shaping digital asset taxation
• Key definitions essential for interpreting digital asset transactions
• Tax consequences of acquisition, disposal, exchanges, staking, mining, airdrops, and hard forks
• Form 1099‑DA: reporting rules, exceptions, and reconciliation strategies
• Basis tracking rules and practical methods for maintaining accurate records
• Due diligence considerations when advising clients with digital asset exposure
• Common compliance pitfalls and strategies for minimizing taxpayer risk

Learning Objectives

• Define essential terminology related to digital assets and common transaction types
• Interpret core IRS and congressional guidance governing the taxation and reporting of digital assets
• Analyze the digital asset disclosure question on federal income tax forms and determine appropriate taxpayer responses
• Explain the purpose, operation, and compliance requirements of the new digital asset broker reporting rules, including Form 1099‑DA
• Apply best practices for digital asset basis tracking, recordkeeping, and transaction reconciliation
• Identify key due diligence questions and risk indicators when advising clients with digital asset activity

Level
Update

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic understanding of digital assets such as virtual currency.

Advance Preparation
None