The Digital Assets question
At any time during 2023, 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)?
is required to be answered on the 2023 Federal 1040 income tax return.
Reporting cryptocurrency income on the Federal 1040 income tax return does not change the answer from No to Yes.
In the Online versions, the question may be found by:
- Down the left side of the screen, select Wages & Income.
- Scroll to the bottom of the screen and select Done with income.
- Continue through several screens until you reach the screen Did you have a financial stake in a digital asset?
IRS FAQ here explains:
Checking “Yes”: Normally, a taxpayer must check the "Yes" box if they:
- Received digital assets as payment for property or services provided;
- Transferred digital assets for free (without receiving any consideration) as a bona fide gift;
- Received digital assets resulting from a reward or award;
- Received new digital assets resulting from mining, staking and similar activities;
- Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);
- Disposed of digital assets in exchange for property or services;
- Disposed of a digital asset in exchange or trade for another digital asset;
- Sold a digital asset; or
- Otherwise disposed of any other financial interest in a digital asset.
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