The Internal Revenue Service (IRS) has updated the encryption section of the 2022 draft instructions for tax return 1040. detail.
New IRS Instructions for Tax Form 1040
The Internal Revenue Service (IRS) has announced 2022. draft instructions About last week’s tax form 1040. Form 1040 is the tax form used to file individual income tax returns in the United States. The new instructions include some changes related to cryptocurrencies.
The section titled “Virtual Currencies” has been replaced by the section titled “Digital Assets”. IRS details:
A digital asset is a digital representation of value recorded on a cryptographically secured distributed ledger or similar technology. For example, digital assets include non-fungible tokens (NFTs) and virtual currencies such as cryptocurrencies and stablecoins.
In contrast, NFTs and stablecoins were not mentioned in 2021. instructions For tax form 1040.
The guidance states that if a taxpayer receives “as a reward, reward or payment for property or services” at any time during 2022, the taxpayer must complete the digital asset question on page 1 of tax return 1040. It is explained that you need to check the “Yes” box next to . )” or “selling, bartering, gifting or otherwise disposing of Digital Assets (or any financial interest in Digital Assets)”.
of 1040 Draft Tax Return The 2022 edition was released in August.
Matt Metras, a registered agent and cryptocurrency tax expert at MDM Financial Services in Rochester, New York, reportedly told CNBC on Monday:
I think it’s a good change. People who trade things like NFTs don’t consider it a cryptocurrency.
He added that the IRS’s “broader language” could include new categories such as taxpayers receiving digital assets from “games they play and earn.” Metras said:
Miles Fuller, head of government solutions at Taxbit and former senior attorney at the IRS’s principal law firm, told Bloomberg:
The IRS is gaining traction by consolidating terminology around this digital asset terminology.
“So it means that in the near future, it will likely happen. These regulations will be announced and the IRS will continue to make progress towards implementing the regulatory regime,” he opined. rice field. “Probably sooner or later.”
What do you think of the IRS’ revised cryptography-related instructions? Let us know in the comments section below.
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