Forbes has published an article, IRS Rules On Reporting Bitcoin And Other Crypto Just Got Even More Confusing, which discusses whether crypto account holders who bought, but did not sell, virtual currency in the year 2020 should answer “Yes” or “No” to the question based on updated FAQ and the 1040 instructions. The article begins as follows:
On March 2, the IRS updated the Frequently Asked Questions (FAQs) on Virtual Currency Transactions. The new FAQ provides that taxpayers whose only crypto transactions include the purchase of virtual currency with real currency need not answer yes to the question on the front page of the 2020 IRS Form 1040. This instruction is directly contrary to the plain reading of the simple question on cryptocurrency, which is highlighted in red here:
Click here to see full article: IRS Rules On Reporting Bitcoin And Other Crypto Just Got Even More Confusing.
Posted by Jessica Ji, Associate Editor, Wealth Strategies Journal.