The IRS added a clause on cryptocurrencies to the main body of Form 1040. Previously, the question of ownership of crypto assets was in Appendix 1, which not all taxpayers filled out.
The IRS has moved the issue of ownership of cryptocurrencies to the main body of Form 1040, which is filled out by most taxpayers in the country. Now the question “During 2020, did you receive, sell, or otherwise acquired financial interests in any digital currency?” located at the top of the form under the fields where you need to enter personal data.
In October 2019, the IRS distributed a draft of the new Form 1040, Appendix 1 – Additional Income and Income Adjustments. However, this application does not fall into the hands of all taxpayers. Gilded Chief Financial Officer Joey Ryan said the updated filing form suggests much more interest from the IRS in cryptocurrencies than previously thought.
The innovation is likely to increase the number of taxpayers reporting on cryptocurrencies who were not previously aware of this need. This will have a major impact on the current tax season, according to Daniel Hannum, COO of Zenledger.
