Home
News
The Internal Revenue Service (IRS), an enforcement agency of United States federal tax laws, on January 24th, 2023 reminded taxpayers as they must again answer a digital asset question and report all digital asset-related income whenever they file their 2022 federal income tax return. Same as they did for fiscal year 2021.
In its update, IRS recommended to check “Yes” for receiving, earning, transferring or selling cryptocurrencies for any monetary benefits that further includes mining and staking. Along with the deadlines that approach for the filing the 2022 Federal Income Tax return, IRS’s list reports the requirements for the general public who are dealing with cryptocurrencies.
It can be seen that until 2021, IRS used “virtual currencies,” in income tax related reporting forms which now have been updated to the new term “digital assets.” Now, all United States citizens need to answer questions that will be related to cryptocurrencies, no matter if they got engaged in any transactions that include digital assets.
Meanwhile all tax filers are needed to answer some questions with just Yes or No. IRS stated in its official site that a taxpayer must check the “Yes,” box if they “received digital assets as payment for property or services provided; transferred digital assets for free (without receiving any consideration) as a bona fide gift; received digital assets resulting from a reward or award; received new digital assets resulting from mining, staking and similar activities; received digital assets resulting from a hard fork (a branching of a cryptocurrency’s blockchain that splits a single cryptocurrency into two); disposed of digital assets in exchange for property or services; disposed of a digital asset in exchange or trade for another digital asset; sold a digital asset; or otherwise disposed of any other financial interest in a digital asset.”
On the other hand, a taxpayer who merely owned digital assets during 2022 can check the “No” box as long as they did not engage in any transactions involving digital assets during the year.
Moreover, they can also select the “No,” if their activities were limited to one or more from “holding digital assets in a wallet or account; transferring digital assets from one wallet or account they own or control to another wallet or account they own or control; or purchasing digital assets using U.S. or other real currency, including through electronic platforms such as PayPal and Venmo.”
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
