In Cryptocurrency and NFT Tax Considerations Based on Recent IRS Strategy and Guidance, Tax Management Memorandum (June 19, 2023), the authors suggest that taxpayers can claim a tax deduction under §165 for cryptocurrency tokens that are worthless or abandoned. The article posited that an individual can abandon the tokens by “burning [them] (i.e., sending them to a null address)” and such action is among those that “are qualified as tax events where taxpayers can claim a deduction related to the crypto tokens that they own.”
However, as discussed around a year ago in Libin Zhang, The L Word: A ...