This paper opens up the world of cryptocurrency and digital assets to tax analysis. Although some common aspects of taxation of crypto currency have been agreed upon and compliance obligations are clear – there are many nuances that remain unclear and require analysis. It considers the various forms of cryptocurrency and digital assets, focusing on the key characteristics that can affect the tax outcomes.
This paper also revisits the fundamental questions – such as whether the transaction takes place on revenue or capital account and the capital gains tax exceptions. It goes on to consider some more unusual cryptocurrency transactions like staking, lending, borrowing, and other activities with cryptocurrency that have tax implications which may be outside the norm.