The Internal Revenue Service (IRS), which enforces federal tax laws in the United States, has given the public a list of what they need to report about cryptocurrencies as the 2022 deadline for filing federal income tax returns approaches.
IRS tax forms that used to talk about “virtual currency” have been changed to talk about “digital assets” up until 2021. Everyone in the U.S. must answer questions about cryptocurrency, even if they have yet to buy or sell any digital assets.
There is a question about digital asset income on U.S. tax forms 1040 (individual), 1040-SR (U.S. Tax Return for Seniors), and 1040-NR (U.S. Nonresident Alien Income Tax Return). All tax returns must answer the above question, and the IRS has told us that the answer must be “Yes” in nine situations.
The above rules apply to any situation where a person receives, makes, transfers, or sells cryptocurrency for money. Taxpayers who meet the requirements must report all gains from the sale or exchange of digital assets on their tax returns. If users fall into this category, they should be sure to check the box.
If all you’ve done with cryptocurrency is store it, move funds between your own wallets, or buy it with regular currency, you can safely choose “No” on the form.
On the other hand, since FTX fell, the SEC has more power to regulate cryptocurrencies. More and more people are calling for stricter enforcement in Washington and on Wall Street. Congress recently raised the budget and gave more money to the finances.
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