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HBO and The Ringer's Bill Simmons hosts the most downloaded sports podcast of all time, with a rotating crew of celebrities, athletes, and media staples, as well as mainstays like Cousin Sal, Joe House, and a slew of other friends and family members who always happen to be suspiciously available.
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Digital Assets, Real Taxes: The Tax Implications of Trading Cryptocurrency – Jack Labranche Tax Senior
Trading cryptocurrency might feel like digital magic, but the tax consequences are very real. In this essential episode of Knowing What Counts, senior tax associate Jack LaBranche demystifies the complex world of digital asset taxation.
The conversation begins with a clear distinction between digital assets (anything digital with value) and cryptocurrency (a specific type of digital asset functioning as digital money). Jack expertly breaks down the five key activities that trigger tax events: selling crypto, exchanging between different cryptocurrencies, using crypto to purchase goods, earning crypto through mining or staking, and receiving crypto as payment for services. Each scenario carries distinct tax implications that traders need to understand.
Most crucially, Jack explains that the IRS considers cryptocurrency as property rather than currency, subjecting it to capital gains rules similar to stocks. However, crypto enjoys a significant advantage over traditional securities – it currently isn't subject to the "wash sale rule," allowing traders to sell at a loss, immediately repurchase, and still claim the tax loss. This creates a powerful tax planning opportunity, though Jack cautions this loophole may close in the future. Other digital assets like NFTs face specialized treatment, potentially being taxed as collectibles at rates up to 28%.
The conversation also covers practical considerations: the critical difference between crypto wallets (digital safes for your keys) and exchanges (trading platforms with no FDIC protection), essential record-keeping practices, and upcoming regulatory changes like the new Form 1099-DA arriving in 2025. Jack's final advice emphasizes education, meticulous record-keeping from day one, and working with tax professionals who understand the rapidly evolving digital asset landscape.
Whether you're a crypto novice or experienced trader, this episode delivers actionable insights to help you protect your digital investments from unexpected tax surprises. Listen now and ensure your crypto strategy accounts for what truly counts – keeping more of your gains through proper tax planning.
To learn more about MP CPAs visit:
https://thempgroupcpa.com/
MP CPAs
413-739-1800
Chapters
1. Introduction to Crypto and Taxes (00:00:00)
2. What Creates Taxable Crypto Events (00:01:41)
3. How Different Digital Assets Are Taxed (00:03:57)
4. Wallets vs Exchanges Explained (00:06:45)
5. Crypto Losses and Planning Opportunities (00:08:01)
6. Record Keeping and Compliance Tips (00:09:40)
7. Final Advice for Digital Asset Investors (00:12:10)
18 episodes
