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Taxation Law Section 

This month’s meeting will be held on Thursday, November 14th at noon at Kundra & Associates, 110 North Washington Street, Suite 406, Rockville. Please register online at

or call 301-424-7585 to confirm that you will be attending and we will order lunch for you. In October we enjoyed a terrific presentation by Alla Cates, Esq. on Update on Tax Preparer Audits and Examinations by the Comptroller of Maryland.  If you wish to present, participate or otherwise just show up, we would love to have you join us!

Recent Tax Law Updates

IRS Updates on Treatment of Virtual Currency
While continuing to treat virtual currency as a capital asset, in Notice 2014-21, 2014-16 IRB 938, the IRS speaks to its equivalent value in real currency and its treatment.  On October 9, 2019, the IRS issued Rev Rul 2019-24, 2019-44 IRB,  Among other items, the IRS noted that:

• The sale of virtual currency must recognize capital gain or loss when received in exchange for performing services is ordinary income. (FAQ 4)

• The recipient of said currency is to report income equal to the FMV of the virtual currency (in U.S. dollars) when received. When the transaction occurs on the blockchain (an on-chain transaction), the virtual currency is considered received on the date and time of recording on the distributed ledger. (FAQ 11) 

• The basis of the currency is established by when the virtual currency is received. (FAQ 12) The basis of property exchanged for virtual currency is the fair market value of the property at the time of the exchange. (FAQ 17)

• Similar to other asset transactions, gain or loss is the difference between FMV when received and the adjusted basis of the property exchanged. (FAQ 19)

• Capital gains and losses are reported on Form 1040, Schedule D and Form 8949, Sales and Other Dispositions of Capital Assets. (FAQ 40)

• FMV of virtual currency:

  • Obtained through a cryptocurrency exchange is the amount that is recorded by the cryptocurrency exchange for that transaction in U.S. dollars. (FAQ 25)
  • When obtained through a peer-to-peer transaction (not through a cryptocurrency exchange), FMV is again on the date and time the transaction was recorded on the distributed ledger (on-chain transaction) or, if not recorded (off-chain transaction) when it would have been recorded on the ledger were it an on-chain transaction. (FAQ 26)
  • To substantiate the fair market value taxpayers can use a cryptocurrency or blockchain explorer otherwise they must establish that FMV used is an accurate representation of the cryptocurrency’s FMV. (FAQ 26) 
  • When selling/exchanging, using multiple units of virtual currency that were obtained at different times and that have different basis may choose which units of virtual currency were sold, exchanged or otherwise disposed of if they specifically identify which unit or units of virtual currency were involved in the transaction and substantiate the basis in those units. (FAQ 36) 
  • If the Taxpayer does not specifically identify sold, exchanged or otherwise disposed of virtual currency are deemed to have sold the units on a first-in-first-out (FIFO) basis. (FAQ 38)

USTC Says NO to Second Amended Petition. The Tax Court refuses to allow a taxpayer to amend Tax Court petition a second time because doing so would unfairly prejudice the IRS. (Whitesell, TC Memo 2019-126).


If you have any suggestions, thoughts or comments, please contact Chaya directly at


If you would like to receive our BAMC Taxation Law Section listserve messages, please contact Cindy at


Chaya Kundra


Section Meetings

November 14, 2019
December 12, 2019
January 9, 2020
February 6, 2020
March 12, 2020
April 9, 2020
May 14, 2020

Meetings will be held on the 2nd Thursday of the month at Noon at the offices of Kundra & Associates, P.C., located at 110 N Washington St., Suite 406, Rockville, MD 20850, except otherwise noted.

Contact Us
Bar Association of
     Montgomery County, MD

27 West Jefferson St.
Rockville, MD 20850
Ph: 301-424-3454
Our Mission

We provide access to, and improve the administration of justice in our ever-evolving community. We offer valuable benefits, services and opportunities to our members. We advance the delivery of quality legal services by our members.