New IRS Form 1040 to Ask Taxpayers About Cryptocurrency
A draft version of the 2019 tax form begins with a question on virtual currencies.
Starting next year, taxpayers using the Form 1040 to report income will be asked about their cryptocurrency use.
In a draft of the new form, the IRS asks: “At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”
The IRS notes that forms generally are subject to approval by the Office of Management and Budget before they can be officially released. “Drafts of instructions and publications usually have some changes before their final release,” the IRS states.
The IRS draft form comes on the heels of new guidance issued on Oct. 8 for taxpayers who use or invest in virtual currency.
Expanding on guidance from 2014, the IRS issued two new detailed guides on Oct. 8 to help taxpayers better understand their reporting obligations for specific transactions involving virtual currency, which includes Revenue Ruling 2019-24 and frequently asked questions.
The FAQ addresses a number of issues for those who use virtual currency as payment for goods or services or receive it as employment compensation.
The new revenue ruling addresses common questions by taxpayers and tax practitioners regarding the tax treatment of a “cryptocurrency hard fork.”