{"id":38360,"date":"2021-03-04T20:03:39","date_gmt":"2021-03-04T18:03:39","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=38360"},"modified":"2025-08-30T04:17:06","modified_gmt":"2025-08-30T01:17:06","slug":"irs-clarifies-when-bitcoin-need-not-be-reported-on-a-tax-return","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/irs-clarifies-when-bitcoin-need-not-be-reported-on-a-tax-return\/","title":{"rendered":"IRS clarifies when Bitcoin need not be reported on a tax return"},"content":{"rendered":"<p>US residents do not need to report the acquisition of cryptocurrency on the first page of Form 1040 if they adhere to the Buy&#038;Hold strategy \u2014 a strategy that involves buying assets and holding them long term in anticipation of substantial price growth. This follows from the <a href=\\\"https:\/\/www.irs.gov\/individuals\/international-taxpayers\/frequently-asked-questions-on-virtual-currency-transactions\\\" target=\\\"_blank\\\" rel=\\\"noopener\\\">IRS&#8217;s updated FAQ page<\/a> of the Internal Revenue Service.<!--more--><\/p>\n<p>Last year the IRS <a href=\"https:\/\/u1f987.com\/en\/news\/us-residents-to-report-cryptocurrency-investments-on-the-first-page-of-the-tax-return\">released a draft return<\/a>, where the taxpayer question is framed as follows:<\/p>\n<blockquote>\n<p>&#8220;Have you during 2020 ever received, sold, sent, exchanged, or otherwise acquired any material interest in any of the virtual currencies?&#8221;<\/p>\n<\/blockquote>\n<p>At the time, many market experts criticised the new rules.<\/p>\n<blockquote class=\\\"twitter-tweet\\\" data-conversation=\\\"none\\\">\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">Even if you think BTC is the only true coin, the fact is other projects utilize other chains that need a coin to operate. IRS asking US residents to declare all crypto is as inappropriate as asking citizens to declare all email addresses, social media handles, or data plans.<\/p>\n<p>\u2014 Justin Winston Ono Wales (@WinstonOnoWales) <a href=\\\"https:\/\/twitter.com\/WinstonOnoWales\/status\/1296573451591794689?ref_src=twsrc%5Etfw\\\">August 20, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<blockquote>\n<p>&#8220;Asking the IRS to declare all crypto assets is as inappropriate as asking for all email addresses, social media accounts, or data plans,&#8221; wrote Justin Wales, co-chair of the Blockchain and Digital Currency Practice.<\/p>\n<\/blockquote>\n<p>Some tax-management experts said the rules require further clarification.<\/p>\n<p>Only in early 2021 did the agency clarify that a simple purchase and subsequent holding of a virtual currency does not need to be reported on the tax return.<\/p>\n<div id=\\\"attachment_126870\\\" style=\\\"width: 1340px\\\" class=\\\"wp-caption aligncenter\\\"><img loading=\\\"lazy\\\" decoding=\\\"async\\\" aria-describedby=\\\"caption-attachment-126870\\\" class=\\\"wp-image-126870 size-full\\\" src=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/IRS.png\\\" alt=\\\"U.S. tax agency explains when Bitcoin need not be reported on a tax return\\\" width=\\\"1330\\\" height=\\\"520\\\" srcset=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/IRS.png 1330w, https:\/\/u1f987.com\/wp-content\/uploads\/IRS-300x117.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/IRS-1024x400.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/IRS-768x300.png 768w\\\" sizes=\\\"auto, (max-width: 1330px) 100vw, 1330px\\\" \/><\/p>\n<p id=\\\"caption-attachment-126870\\\" class=\\\"wp-caption-text\\\">Source: IRS website.<\/p>\n<\/div>\n<p>According to the IRS, a taxable event occurs when you sell a crypto asset.<\/p>\n<blockquote>\n<p>&#8220;When you sell virtual currency, you must determine the capital gain or loss from the transaction,&#8221; the IRS website states.<\/p>\n<\/blockquote>\n<p>Earlier ForkLog reported that the IRS <a href=\"https:\/\/u1f987.com\/en\/news\/irs-sends-cp2000-notices-to-coinbase-users-over-crypto-tax-debts\">sent letters<\/a> to cryptocurrency holders demanding settlement of large liabilities to the state.<\/p>\n<p>Subscribe to ForkLog news on Telegram: <a href=\\\"https:\/\/t.me\/forkloglive\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener\\\">ForkLog FEED<\/a> \u2014 the full news feed, <a href=\\\"https:\/\/telegram.me\/forklog\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener\\\">ForkLog<\/a> \u2014 the most important news and polls.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>US residents do not need to report the acquisition of cryptocurrency on the first page of Form 1040 if they adhere to the Buy&#038;Hold strategy \u2014 a strategy that involves buying assets and holding them long term in anticipation of substantial price growth. This follows from the IRS&#8217;s updated FAQ page.<\/p>\n","protected":false},"author":1,"featured_media":38361,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[558,26],"class_list":["post-38360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-taxes","tag-usa"],"aioseo_notices":[],"amp_enabled":true,"views":"21","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=38360"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38360\/revisions"}],"predecessor-version":[{"id":38362,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38360\/revisions\/38362"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/38361"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=38360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=38360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=38360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}