PUBLISHERS NOTE: The ownership of digital currency including cryptocurrency and Bitcoin has increased exponentially since my first Ohio Family Law Blog article “Bitcoins and Hiding Assets in a Divorce Action” on the subject on October 4, 2014. In that ”Blast From the Past” we provided an overview of bitcoin and cryptocurrencies and we geared it primarily towards my fellow divorce lawyers. Today, I want to update legal developments in this exciting area of Bitcoin And Cryptocurrency Divorce Issues and focus more towards spouses who may be having marital issues and who own bitcoin or other cryptocurrencies.
Finding Hidden Assets During Divorce: Bitcoin And Cryptocurrency
Current Bitcoin and Cryptocurrency Tidbits
Bitcoin and cryptocurrency has been in the news a great amount since the start of this year. In 2017 it soared in value to almost $20,000 per bitcoin, but this January it fell to below $8,000. It appears that it is on its way back up until Twitter joined Facebook and. Google banning cryptocurrency ads on March 26, 2018. At this point, the most popular coins are bitcoin, ethereum, and ripple. Lots of new merchants now accept bitcoin. Did you know that there are even bitcoin ATM’s in Cincinnati and the Dayton area? Interestingly, some people like Jack Dorsey, the CEO of Twitter and Square, believe that bitcoin will become the single global currency in the next 10 years.
Besides being in the news for its incredible value gains and losses, bitcoin and cryptocurrency has also garnered much attention in divorce and family law circles. A lot of that discussion has dealt with the ease to hide crypto ownership, and even if discovered, how it should be valued, especially with its fluctuations which can be extreme at times.
Holzfaster, Cecil, McKnight & Mues has recently updated our free Ebook, “Finding Hidden Income/Assets in a Divorce” to include more information, statistics and tips to help catch liars and cheaters including those who try to conceal bitcoin, crypto and other assets. Click on the home page of our website at www.hcmmlaw.com to download your copy!
Talk To a Dayton Divorce Attorney to Avoid Being Ripped Off By Bitcoin Concealment
Since our last blog post on this topic, we have a new ally also wanting to help find “cheaters” who try to hide these assets and income. The good Ole’ IRS has issued Notice 2014–21 which clarifies its position regarding bitcoin and the myriad of other cryptocurrencies out there. Everyone who owns bitcoin and cryptocurrency should read this IRS Notice! Essentially the IRS does NOT consider these digital assets to be “currency” but rather as “property” and must be treated similar to other traditional property types such as stocks and bonds.
Reporting income or gains/losses is required by the IRS. This obligation creates extensive record keeping requirements. Therefore, tax returns since at least 2016, if completed honestly, should likely identify these assets if owned. Plus, by all reports the IRS is digging hard to find individuals who try to scam the system by under reporting income. Taxpayers BEWARE!
Since 2014, our Dayton divorce attorneys have been very aggressive requiring opposing clients to disclose ownership of bitcoin and cryptocurrency in their interrogatories and other discovery documents. Our attorneys know where and how to look for all sorts of hidden assets including bitcoin/cryptocurrency in tax returns, banks statements and credit card statements – all of which may leave a crypto trail that can be followed if you know the signs. Please understand that tracking bitcoin and cryptocurrencies of your spouse could not only affect property division but alimony too!
Attorneys At Holzfaster, Cecil, McKnight & Mues Focus On Bitcoin And Cryptocurrency Divorce Issues
Dealing in divorce cases with bitcoin and cryptocurrency is a relatively new challenge for lawyers. Few experienced divorce lawyers are familiar how to work through these esoteric issues. One of the keys which I have learned to be successful in securing a client his/her fair share of these assets is to connect with a lawyer/consultant who is an expert in bitcoin/cryptocurrency intricacies. They are rare. We are pleased at Holzfaster, Cecil, McKnight & Mues, LPA to have found an accomplished attorney who is an expert in these digital currency matters, that we can add to our “team” as needed.
We are committed to providing our clients with excellent individualized representation and sound legal advice. Feel free to learn more about our firm at our website at www.hcmmlaw.com. If you live in the Dayton or Southwestern Ohio area and are considering a divorce, please contact us at (937) 293-2141 or email us. We would welcome an opportunity to discuss your situation.
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Robert L. Mues
Robert Mues is the managing partner of Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has received the highest rating from the Martindale-Hubbell Peer Review for Ethical Standards and Legal Ability. Mr. Mues is also a founding member of the "International Academy of Attorneys for Divorce over 50" blog.