Some information on digital asset reporting

Taxpayers are required to report any income or loss associated with digital assets.

For 2022 digital assets have taken a hit so reporting the losses should benefit the taxpayer for this year.

Below are some points regarding the reporting of digital assets:

·????????The IRS changed the terminology of the mandatory question on the tax return from “virtual currencies”, in 2021, to “digital assets” for 2022.

·????????What is a digital asset? As defined by the IRS, it is a digital representation of value recorded cryptographically secured, distributed ledger. Examples include Stablecoins, Convertible virtual currency, and cryptocurrency.

·????????The taxpayer can answer “no” to the digital asset question if they only held it in their wallet, transferred between their wallets, or purchased digital assets using real currency.

Have a question about this or another tax-related matter? Feel free to reach out!

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