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Dealing With Cryptocurrency During Divorce

Cryptocurrency2

While cryptocurrency used to be considered a fringe technology by many, this is no longer the case. Rather, cryptocurrency is treated as a real asset that can be used by companies, investors, and banks. Digital currency, like any other asset, is divisible upon divorce, so if you or your spouse own cryptocurrency and you have questions about who will get to keep it upon the dissolution of your marriage, call a dedicated Fort Lauderdale property division lawyer who can advise you.

Keep Your Records

In Florida, couples who decide to get divorced are required to divide their marital property, or property acquired by either spouse during the course of the marriage, in an equitable manner. Separate property, on the other hand, which includes assets that were obtained prior to marriage. will remain in the hands of the original owner. This makes determinations about who obtained the asset and when the asset was acquired, of particular importance during divorce. To establish these facts, couples will need to provide copies of receipts, invoices, and documentation related to the purchase of their assets, including cryptocurrency. This documentation can also be used to locate the cryptocurrency, at which point a court can divide it.

If a spouse is not forthcoming with these records, then it may be necessary to look closer at his or her banking records, keeping an eye out for unexplained transfers or spending. Even the lack of a paper trail can help someone discover whether a spouse is using cryptocurrency. In some cases, it may be necessary to hire a forensic expert, who can find signs of digital currency transactions.

Consider the Tax Implications

Cryptocurrency can be treated as property for tax purposes, meaning that it is subject to capital gains tax if the asset is sold at a profit. When a person purchases goods or services with cryptocurrency that has gained in value since it was acquired, he or she will also incur capital gains taxes on that purchase. Ultimately, how much someone owes in cryptocurrency taxes will depend on his or her income and when the digital currency was acquired. These tax implications can play a critical role not only in valuing cryptocurrency, but also when accessing it or transferring it, making it especially important for divorcing couples who are deciding how to divide their digital assets, to speak with an attorney about the tax-related repercussions of continued ownership of this type of asset.

Call a Property Division Lawyer in Fort Lauderdale

Cryptocurrency can be valuable, so if you and your spouse have decided to divorce, it is crucial for you to make sure that these kinds of assets are disclosed and valued. To learn more about how cryptocurrency works, the tax implications of owning it, and how to negotiate a fair property settlement with your spouse, please reach out to dedicated Florida property division lawyer Sandra Bonfiglio, P.A. today by calling 954-945-7591, or contact us online to set up a free consultation with a member of our experienced legal team.

Source:

forbes.com/advisor/investing/what-are-cryptocurrency-taxes/

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