Taxpayers Must Report All Digital Asset Income

Taxpayers must answer a digital asset question and report all digital asset-related income when they file their 2023 federal income tax return. Common digital assets include convertible virtual currency and cryptocurrency, stablecoins, and non-fungible tokens (NFTs).
 
The question appears at the top of Forms 1040, 1040-SR, and 1040-NR, and was revised this year to update wording. The question was also added to Forms 1041, 1065, 1120, and 1120-S.
 
Everyone who files these forms must check one box, answering either "Yes" or "No" to the digital asset question. The question must be answered by all taxpayers, not just by those who engaged in a transaction involving digital assets in 2023.
 
Depending on the IRS form used, the digital assets question follows this basic formulation, with appropriate variations tailored for corporate, partnership, or estate and trust taxpayers:
 
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)?
 
Learn more here, including in what situations a taxpayer should answer either “Yes” or “No” to the digital asset question, and how to report digital asset income.