Is Cryptocurrency A Marital Asset In Florida?
Read any financial news article and it is hard to avoid discussion of Bitcoin and cryptocurrency in general. Everyone seems to be talking about it, from Elon Musk to Kim Kardashian. Is it a fad, a get rich quick scheme, or the future of currency? While speculations vary, the more important question is whether cryptocurrency can be considered a marital asset. If it is, it needs to be valued and equitably divided should the marriage end in divorce. If you can receive your IRS tax refund in cryptocurrency, and if “crypto” can be converted to cash, it may be viewed as income, and therefore must be reported on a financial statement. Other issues may arise if one spouse wasn’t aware of the purchases, or if the other spouse is using cryptocurrency to stash funds or hide assets.
What is Cryptocurrency?
Mining bitcoin or other cryptocurrencies involves solving blockchains using a computer video card. Algorithms solve and verify transactions on the mining network. It is validated using a blockchain and the price of “crypto” can fluctuate violently on an hourly, daily and weekly basis. However, there is a limited amount of Bitcoin left to be “mined.” Once supply runs out, demand is expected to surge. Other coins available like DogeCoin are worth mere pennies, but there is an endless supply. Analysts and economists are split about whether cryptocurrency is too volatile to invest in, but the trading markets are open 24/7 and recent news has seriously affected the value of many portfolios. Maybe you simply aren’t comfortable with making a risky investment, and you thought your soon-to-be ex was on the same page. Now you suspect your ex used marital funds to purchase cryptocurrency. Does this mean that the crypto should be equitably distributed? When should it be sold, or should shares be divided?
Determining Cryptocurrency Value
Courts in other states have ruled that cryptocurrency is a marital asset if it was purchased or traded during the marriage. Unless cryptocurrency was gifted from a third party to one spouse, or one spouse acquired or mined cryptocurrency before the marriage, it must be equitably distributed. The issue with “crypto” is determining its value because the price can fluctuate so often. It is also troubling that people who mine assets have no password retrieval abilities and cannot simply print a balance sheet. It does have an exchange rate, and it can be sold or traded in for USD. Many users utilize Coinbase to keep track of what they buy and sell and to manage their cryptocurrency portfolio. If you have casually discussed “crypto” with your spouse, if you believe your spouse is mining for Bitcoin or another currency, or if you have joint bank statements reflecting deposits or transfers from an electronic currency source, notify our attorneys at Bubley & Bubley. Forensic accounting may be necessary. Selling cryptocurrency may also incur tax liability.
Contact Bubley & Bubley, P.A Today
Divorce is a complicated and difficult enigma for all parties involved. Often divorce is the most difficult endeavor a family will have to face. Even considering the thought of your assets being sold or losing your home can be difficult to process, but it is reality for many. The truth is that distributing your possessions, assets, and property equitably is crucial for the divorce to be finalized. If you seriously suspect that your ex-spouse is hiding assets, especially in cryptocurrency, you must act quickly. Any assets acquired during the marriage, including digital currency, is marital property. If you have questions about equitable distribution and the divorce process, contact our Tampa divorce attorneys at Bubley & Bubley,P.A. With decades of combined experience counseling clients through divorce and estate planning, we are the right choice. Call today to schedule a consultation.
Sources:
forbes.com/advisor/investing/what-is-cryptocurrency/
irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions