On your 2023 federal tax return, you must answer “Yes” or “No” to a digital asset question:
At any time during the tax year, 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)?
If you didn’t have digital asset transactions, answer “No”
Check No in the digital assets box if you:
- Didn’t own any digital assets
- Only owned or held digital assets in a wallet or account, but did not engage in any digital asset transactions during the year
- Purchased, but did not sell, digital assets using U.S. or other real currency, including through electronic platforms
- Transferred digital assets from one wallet or account you own or control to another wallet or account you own or control ( unless you paid a transaction fee with digital assets). This would be a digital asset transaction.)
If you had digital asset transactions, answer “Yes”
Check Yes in the digital assets box if you:
Received digital assets for:
- Payment for property or services provided
- A reward or award
- Mining, staking and similar activities
- An airdrop as it relates to a hard fork
Disposed, sold, exchanged or transferred ownership of digital assets:
- For another digital asset
- For U.S. dollars or other currency
- In exchange or trade for property, goods or services in any amount
- By paying a transfer fee with digital assets
- By a transfer of ownership or financial interest.
You have a financial interest in a digital asset if you:
- Are recorded as the owner of a digital asset
- Have an ownership stake in an account that holds one or more digital assets, including the rights and obligations to acquire a financial interest
- Own a wallet that holds digital assets
Source: IRS, Modified by Zaher Fallahi
End of IRS Material
Zaher Fallahi, Tax Defense Attorney, CPA, assists taxpayers nationwide with Cryptocurrency Tax, Anti-Money Laundering, Foreign Gifts & Inheritance, Delinquent FBAR filing, IRS audits, Tax Preparation, Offer-In-Compromise, Undisclosed Foreign Bank Accounts, and other international tax matters. Tel.: (310) 719-1040, (714) 546-4272 and (877) 687-7558 toll free nationwide. Websites: zflegal.com and zfcpa.com E-mail taxattorney@zfcpa.com