November 11, 2019
As part of the IRS effort to make taxpayers aware of the possible tax consequences involving virtual currency, the following question has been added to the top of Form 1040, Schedule 1:
The taxpayer should answer this question either Yes or No. The Schedule 1 does not need to be filed if the answer to this question is NO and they do not have to file Schedule 1 for any other purpose.
The IRS has also issued the following additional detailed guidance to help taxpayers better understand their reporting obligations for specific transactions involving virtual currency:
The new guidance supplements the guidance the IRS issued on virtual currency in Notice 2014-21.
See the following for more information: