US crypto firms invest in tax solutions as IRS updates reporting forms

US crypto firms invest in tax solutions as IRS updates reporting forms


United States regulators are continuing to fine-tune their tax reporting requirements for cryptocurrency users. A second draft of Form 1040 from the Internal Revenue Service for the 2020 tax season published online suggests that the agency will now require anyone who was engaged in any transaction involving cryptocurrency in 2020 will need to declare it:

“If, in 2020, you engaged in any transaction involving virtual currency, check the ‘Yes’ box next to the question on virtual currency on page 1 of Form 1040 or 1040-SR.”

The draft guidance clarifies that transactions encompass “the receipt or transfer of virtual currency for free” (e.g., via airdrops and hard forks), the exchange of virtual currency for goods or services, the purchase or sale of virtual currency, an exchange of virtual currency for other property, including for another virtual currency, and the acquisition or disposition of “a financial interest in virtual currency.”

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Simply holding virtual currency in a wallet or account, or

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