The Tax Treatment of Tokens: What Does it Betoken?

19 Pages Posted: 24 Oct 2017

See all articles by David J. Shakow

David J. Shakow

University of Pennsylvania Law School; Chamberlain Hrdlicka

Date Written: August 3, 2017


Digital tokens have been used to raise substantial amounts of money. But little attention has been paid to the tax consequences surrounding their issuance and sale. There are significant potential tax liabilities lurking in the use of digital tokens. But, because of the anonymity inherent in the blockchain structures used for the issuance of tokens and payments for them, there is a significant question as to whether those tax liabilities will ever be collected.

Keywords: Taxation, securities, corporate finance, digital tokens, bitcoins, block chain, e-commerce, bearer instruments, virtual currencies, taxation, DAO token, tax treatment of tokens, tokens as equity, issuer obligations

JEL Classification: H26, K22, K34

Suggested Citation

Shakow, David J., The Tax Treatment of Tokens: What Does it Betoken? (August 3, 2017). Tax Notes, Vol. 156, P. 1387, Sept. 11, 2017; U of Penn, Inst for Law & Econ Research Paper No. 17-45. Available at SSRN:

David J. Shakow (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

Chamberlain Hrdlicka ( email )

300 Conshohocken State Rd
West Conshohocken, PA 19428
United States

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