Frequently Asked Questions on Virtual Currency Transactions
What happens if you don’t disclose crypto activity this tax season?
There’s a question about “virtual currency” on the front page of your tax return, making it clear you need to disclose crypto activity.
If you don’t report transactions and face an IRS audit, you may be hit with interest, penalties or even criminal charges.
A disposal of “virtual currency that was held as a capital asset through a sale, exchange, or transfer” must be reported on Form 8949 and on Schedule D, as is the case of sales of any other type of capital asset.