IRS CRYPTO QUESTION
Digital Asset Question Added to More Tax Forms
The IRS has included a crypto question on four additional tax forms ahead of filing season . The tax agency said it has reworded the question that had already appeared at the top of Form 1040 , Individual Income Tax Return ; Form 1040-SR , U . S . Tax Return for Seniors ; and 1040-NR , U . S . Nonresident Alien Income Tax Return . Now , the digital asset question has been added to the following forms :
• Form 1041 , U . S . Income Tax Return for Estates and Trusts
• Form 1065 , U . S . Return of Partnership Income
• Form 1120 , U . S . Corporation Income Tax Return
• Form 1120-S , U . S . Income Tax Return for an S Corporation Depending on the form , the digital assets question asks the following , with appropriate variations tailored for corporate , partnership , or estate and trust taxpayers : “ At any time during 2023 , did you : ( a ) receive ( as a reward , award or payment for property or services ); or ( b ) sell , exchange , or otherwise dispose of a digital asset ( or a financial interest in a digital asset )?”
The IRS defines a digital asset as “ a digital representation of value that is recorded on a cryptographically secured , distributed ledger or any similar technology .” Common digital assets include convertible virtual currency and cryptocurrency ; stablecoins ; and non-fungible tokens ( NFTs ).
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