IRS just got serious about cryptocurrency

The just-released draft copy of Form 1040 Schedule 1 that starts off with the question: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

I’m sure much discussion will follow about the potential consequences of answering with a false negative. Responding with an affirmative, no doubt, will lead to additional accounting requirements.

What kind of transactions trigger an unexpected tax? See the TaxGirl article linked below.

 What can be done now to avoid a nasty surprise tax assessment letter from IRS? Taking proactive measure of preparing a pro-forma tax calculation incorporating all of the transactional information already reported to IRS is the best starting point. That may allow the opportunity to make adjustments, offsetting or counterbalancing transactions before the end of the year.


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