IRS States that Just Holding Crypto Won’t Need Disclosure in Tax Form

By Abhimanyu Krishnan | News | 27 Oct 2020

The United States Internal Revenue Service (IRS) has clarified that those who have only held crypto assets in 2020 need not answer yes to the question of whether they have received any financial interest via cryptocurrencies. The IRS issued the clarification in a draft published on October 23. 

  • The IRS released instructions for filing 1040 tax forms, clarifying tax declarations for digital assets
  • The main highlight from the draft is that only those who have sold cryptocurrencies, exchanged it for goods and services and/or exchanged it for other assets, will have to declare yes to the question of having acquired any financial interest via the asset
  • Those who have received cryptocurrencies via airdrops or hard forks will also have to respond yes
  • However, if users have simply bought cryptocurrencies and moved it between their own personal wallets, they will not need to respond yes
  • The IRS is still deliberating on how to best tax cryptocurrencies, and have categorized cryptocurrencies as property; taxpayers are subject to capital gain taxes or ordinary gain taxes depending on whether the asset is in the hands of the taxpayer

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Abhimanyu Krishnan
Abhimanyu Krishnan

Technophile, cryptocurrency enthusiast and journalist.


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