The Exchange People who transacted with virtual currency aren't the only ones who'll be checking the yes box on their next year.
If you received any crypto for free, you're still expected to check yes on the front of your tax return, according to newly released draft instructions earnings in bitcoins 2020 the IRS. Exchanged some virtual currency for goods and services or for other property — including different cryptocurrency? You still need to answer yes.
You'll also need to keep records of your transactions, which can get tricky if you're using multiple exchanges or different types of cryptocurrency. Property, not currency The IRS considers virtual currency to be property — the same way it treats stocks or other investments.
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This way, if you bought some Ethereum and then sell it or if you swap it for something else, you've incurred a capital gain or a capital loss. If you captured a gain, then you're responsible for taxes.
Once you know the IRS has access to the information, it's better to come into compliance before they come calling. Crypto in payment.