IRS Fact Sheet on Digital Asset Reporting

This tax season was the first time that businesses were required to answer a question on their returns—Form 1065, Form 1120, and Form 1120-S—about whether they had any digital asset transfers in 2023. Individuals have previously had such a question on Form 1040 as they do now (sole proprietors answer the question on their personal return). The IRS has extensive FAQs on virtual currency and a new brief Fact Sheet on whether digital asset transactions trigger a “yes” answer on the return. The IRS says “Taxpayers should …keep these guidelines in mind for 2024.” #IdeaoftheDay