Virtual Currency Checkbox on Form 1040

The IRS reminds taxpayers that there is a virtual currency question at the top of Form 1040, Form 1040-SR and Form 1040-NR that asks: “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

When to check “No”:

• Holding virtual currency in their own wallet or account
• Transferring virtual currency between their own wallets or accounts
• Purchasing virtual currency using real currency, including purchases using real currency electronic platforms such as PayPal and Venmo

When to check “Yes”:

• The receipt of virtual currency as payment for goods or services provided
• The receipt or transfer of virtual currency for free that does not qualify as a bona fide gift
• The receipt of new virtual currency from mining and staking activities
• The receipt of virtual currency from a “hard fork”
• An exchange of virtual currency for property, goods or services
• An exchange/trade of virtual currency for another virtual currency
• A sale of virtual currency
• Any other disposition of a financial interest in virtual currency.

If you need help filing your taxes with crypto currency transactions, our tax pro can help.

Set your tax appointment today.