Tax Tip 2023-45: Understand digital asset reporting and tax requirements

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IRS Tax Tips April 5, 2023

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Issue Number:  Tax Tip 2023-45

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Understand digital asset reporting and tax requirements

All taxpayers filing 2022 tax year Forms 1040 and 1040-SR must check a box indicating whether they received digital assets as a reward, award or payment for property or services or disposed of any digital asset that was held as a capital asset through a sale, exchange or transfer.

Examples of digital assets transactions include:

  • A sale of digital assets.
  • The receipt of digital assets as payment for goods or services provided.
  • The receipt or transfer of digital assets for free, without providing any consideration, that does not qualify as a bona fide gift.
  • The receipt of new digital assets as a result of mining and staking activities.
  • The receipt of new digital assets as a result of a hard fork.
  • An exchange of digital assets for property, goods or services.
  • An exchange or trade of digital assets for another digital asset(s).
  • Any other disposition of a financial interest in digital assets.

Reporting digital assets transactions

The Instructions for Form 1040 and 1040-SR and the IRS Digital Assets page have more information.

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