Research the following questions regarding virtual currency, and write your answers in the form of a set of “frequently asked questions” (FAQs) suitable for the website of your CPA firm. As part of your research, consider the IRS’s FAQs on virtual currency transactions (irs.gov/individuals/international -taxpayers/frequently-asked-questions-on-virtual-currency-transactions) and Rev.Rul. 2019−24 (2019−44 I.R.B. 1004). 

a. Since taxpayers want to easily track virtual currency and use it to acquire goods and services, how do taxpayers typically “hold” their virtual currency?

b. Janice acquired bitcoin in 2017 and 2019. This year, she used a portion of her bitcoin holdings to acquire 100 litecoin. What are the tax implications of this transaction? What do you recommend Janice do to help track her acquisition and use of virtual currency (in order to have records readily available about these investments and their tax consequences)?

c. Rajiv acquired $20 worth of bitcoin in 2016 using an automatic teller machine that converted cash to bitcoin. He has never used any of this currency. How should Rajiv answer the virtual currency question on Form 1040 this year? Why? Consider the possibility that there was a “hard fork” or an “airdrop” associated with Rajiv’s bitcoin (also explain these terms in your FAQs).