Perhaps it’s just a generational thing, but to be honest I don’t understand cryptocurrencies. I’ve read various articles and can spout off definitions of blockchain, bitcoin and a host of other cool tech-sounding words and phrases. It does make me feel a little better when I read what the IRS has published over the past couple of years on the subject. It appears to me they are trying to catch up as well.
I do know a few things about income tax. This year there is a question on the front page of the individual income tax return: “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency? -Yes -No” The placement is not accidental. The IRS is telegraphing they are serious now. Further down, you sign a statement saying, “Under the penalties of perjury” (a felony) “I declare that I have examined this return and the accompanying schedules…they are true, correct and complete.” You need to pay attention to this and answer truthfully.
Leaving it blank is not a great idea. The IRS is working to close reporting gaps on virtual currency in the same way they did with foreign assets a decade ago.
If you have any virtual currency questions, please discuss them with your Dent Moses advisor.