2023 Tax Season: Reporting Digital Assets
Reminder from the IRS
The Internal Revenue Service (IRS) has announced that taxpayers must once again address a digital asset question and report all related income on their 2023 federal tax returns.
Reporting Digital Assets
Digital assets, such as cryptocurrency and non-fungible tokens (NFTs), are taxable. Transactions involving these assets must be reported on tax returns.
The IRS provides guidance on answering the digital asset question and reporting related income on its website.
Tax Implications of Digital Assets
The tax rate for digital assets depends on several factors, including the state of residence, holding period, and tax bracket.
Trading one cryptocurrency for another is considered a taxable event.
IRS Focus on Cryptocurrency
The IRS has made cryptocurrency a priority, recognizing its potential for tax evasion and fraud.
Crypto investors and individuals receiving cryptocurrency payments must report taxable transactions on their 2023 tax returns.
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