3 challenges associated with dividing cryptocurrency in a divorce

On Behalf of | Jun 30, 2021 | Uncategorized

Digital currency has become more and more common across Colorado and the nation, and many people navigating divorce now have to figure out how to divide it when they split. If you or your ex own digital currency, you may encounter certain challenges when trying to split it between you.

Per CNBC.com, more than 20 million Americans now hold digital currency, making this aspect of asset division increasingly common in divorce cases. What are some of the hurdles you might encounter when trying to divide digital assets?

Placing a value on them

Part of the problem associated with dividing digital currency in a divorce is figuring out the value of said currency. The value of digital currency often fluctuates from one day to the next, so its worth one day may prove completely different from its worth the following week.

Figuring out tax implications

There are also tax implications that come with owning or dividing digital assets. Depending on circumstances and how much digital currency is worth, the party who bought it may have to pay capital gains taxes. You or your ex may also encounter trouble if the party who holds the digital currency did not properly report it to the IRS.

Transferring them

You may also run into trouble when trying to transfer digital currency to or from your ex. Sometimes, doing so requires enlisting the aid of a financial professional.

Dividing digital assets during a divorce may prove complex. However, failing to account for or fight for these assets has the potential to lead to a significant financial loss.