IRS includes a cryptocurrency question on the front page of the new 1040 tax form
|- The IRS has released a new tax return 1040 for the US citizens.
- Over 150 million people use the form to pay their taxes.
- The first question on the form pertains to virtual currency transactions.
The Internal Revenue Service (IRS) has released a new tax return 1040 for US citizens and the first question on the form is about cryptocurrencies. The IRS requires all tax-paying citizens to declare if they have sold, bought, exchanged or acquired any digital assets. Notably, the form in question is used by about 150 million people to pay their taxes.
The IRS started to include a question concerning digital assets last year. However, the question in the form was used to declare any “Additional Income and Adjustments to Income.”
At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?
Some of the questions regarding cryptocurrency tax payments continue to remain unanswered. For instance, does the IRS treat interest earned from decentralized finance (DeFi) the same as interest earned from centralized finance (CeFi)? Are utility tokens considered “virtual currencies”? Are PoS block rewards treated the same as BTC or should they be treated like dividend re-investments? Nevertheless, including a cryptocurrency-related question on the front page of the major tax form indicates how important the sector is to the regulators.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.