Grayscale is actively considering potential tax consequences related to spot Bitcoin ETFs, responding to inaccuracies surrounding unfavorable tax consequences.
The asset management firm clarified the tax implications for retail investors in the Grayscale Bitcoin Trust (GBTC) through a series of Twitter posts. However, Grayscale says retail investors won’t face taxes when the Bitcoin Trust sells for share redemptions.
Grayscale Clarifies Tax Consequences for GBTC as Grantor Trust
Grayscale asserts GBTC, unlike other ETFs, is primarily structured as a grantor trust for tax purposes.
According to Grayscale, the redemption of cash in grantor trusts does not trigger taxable events for non-redeeming shareholders, such as retail investors. This distinction was underscored, drawing attention to the unique tax treatment compared to mutual funds.
Grayscale Affirms GBTC as Grantor Trust Amidst Ongoing SEC Discussions on Bitcoin ETF
The firm asserts GBTC, unlike other ETFs, is primarily structured as a grantor trust for tax purposes. Furthermore, they maintained its position that the GBTC should be properly regarded as a grantor trust.
This development follows recent reports of another meeting between Grayscale and the US SEC to discuss their spot Bitcoin ETF application.
On December 8, Grayscale and Franklin Templeton interacted with the SEC for a review. Shortly thereafter, representatives from Fidelity appeared before the regulatory body. However, on December 5, the SEC announced an extension of its decision on Grayscale’s spot ETF application to January 24, 2024.
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