"US updates tax requirements for cryptocurrency owners"

" \n The U.S. Internal Revenue Service (IRS) has updated its instructions for disclosing crypto activities. The update provides clarification on who must answer \u201cyes\u201d to the IRS\u2019 crypto question and when it is appropriate to select \u201cno\u201d as the answer. \n \n\n \n IRS publishes new crypto tax filing instructions \n \n\n \n The IRS published\u00a0updated instructions\u00a0for Form 1040 on Dec. 31. They include additional information on how to answer the cryptocurrency question on the main tax form used by individuals to file U.S. tax returns. \n \n\n \n The\u00a0first question\u00a0on Form 1040 is about cryptocurrency. It reads: \u201cAt any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?\u201d Taxpayers only need to answer \u201cyes\u201d or \u201cno\u201d to this question. \n \n\n \n According to\u00a0Cryptotrader Tax, a crypto tax software company, the IRS now requires taxpayers who purchased cryptocurrency in 2020 to answer \u201cyes\u201d to the crypto question on Form 1040 \u2014 not just if they sold, traded, or exchanged cryptocurrency as outlined the previous instructions. The company detailed: \n \n\n \n This language was not present in the prior instructional guidance that was released in October. The IRS will now know everyone who purchased cryptocurrency in 2020 as all taxpayers must answer this question under penalty of perjury. \n \n\n \n In summary, taxpayers must answer \u201cyes\u201d to the IRS\u2019 cryptocurrency question in 2020 if they purchased or received (including from an airdrop or a fork) cryptocurrencies. \n \n\n \n They must also answer \u201cyes\u201d if they sold a cryptocurrency for a fiat currency or exchanged a cryptocurrency for another cryptocurrency. In addition, they need to answer yes if they used cryptocurrency to pay for goods or services. \n \n\n \n Form 1040 for the tax year 2020 showing the cryptocurrency question. Source: IRS \n \n\n \n The new instructions also clarify when taxpayers do not need to answer \u201cyes\u201d to the crypto question. The IRS described: \n \n\n \n A transaction involving virtual currency does not include the holding of virtual currency in a wallet or account, or the transfer of virtual currency from one wallet or account you own or control to another that you own or control. \n \n\n \n \u201cThis is valuable clarification for long-term holders who were unsure if they needed to select yes or no to the question,\u201d Cryptotrader Tax commented. \n \n\n \n The IRS also explained that if a taxpayer disposes of any cryptocurrencies that were held as capital assets through a sale, exchange, or transfer, they must use Form 8949 to figure out their capital gain or loss and report it on Schedule D of Form 1040. \n "

"US updates tax requirements for cryptocurrency owners"

Singapore Tops the World in Crypto EngagementAMP

New Study Shows Where Crypto Investors Pay The Most TaxAMP

How Stablecoins and Other Financial Innovations May Reshape the Global EconomyAMP