With the tax deadline just a few weeks ago—Tax Day is April 18—taxpayers are scrambling to finish and file their returns. One thing that may be causing some confusion this year? Cryptocurrency. While it’s not a new tax topic, conflicting advice about losses and different wording on Form 1040 are resulting in some head-scratching. Here are five things you need to know about cryptocurrency before you file your tax return. The IRS is getting serious about cryptocurrency—er, digital assets. This year, the question near the top of your Form 1040 asks, “At any time during 2022, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?” According to the IRS, “digital assets are any digital representations of value that are recorded on a cryptographically secured distributed ledger or any similar technology.” That includes non-fungible tokens (NFTs) and virtual currencies, such as cryptocurrencies and stablecoins. And just in case there’s any confusion, the IRS notes that “if a particular asset has the characteristics of a digital asset, it will be treated as a digital asset for federal income tax purposes.” In other words, if it looks like a duck, walks like a duck, and quacks like a duck, it may just be a duck.
Full story : Five Things You Need To Know About Cryptocurrency And Taxes.