July 2026- Q&A, Virtual Currency

Q&A with virtual currency

Q1: Where do I report my ordinary income from virtual currency?
A1: You must report ordinary income from virtual currency on Form 1040, U.S. Individual Tax Return, Form 1040-SS, Form 1040-NR, as applicable.

Q2: Where can I find more information about the tax treatment of virtual currency? (updated June 27, 2023)
A2: Information on virtual currency is available at IRS.gov/digitalassets. Many questions about the tax treatment of virtual currency can be answered by referring to https://www.irs.gov/irb/2014-16_IRB#NOT-2014-21 and Rev. Rul. 2019-24.

Q3: What records do I need to maintain regarding my transactions in virtual currency?
A3: The Internal Revenue Code and regulations require taxpayers to maintain records that are sufficient to establish the positions taken on tax returns. You should therefore maintain, for example, records documenting receipts, sales, exchanges, or other dispositions of virtual currency and the fair market value of the virtual currency.

This newsletter contains general information for taxpayers and should not be relied upon as the only source of authority.  Taxpayers should seek professional tax advice for their specific tax situation and for more information.