Crypto Purchases Don’t Trigger IRS Reporting Requirement

Individuals who only purchased cryptocurrency with U.S. dollars and other real currency in 2020 don’t need to disclose that to the IRS this filing season, the agency said in a recent update to its website.

The IRS announced its new position in its frequently asked questions on virtual currency transactions. Individuals who purchase cryptocurrency with another cryptocurrency still have to report their transactions to the agency.

• The IRS began asking cryptocurrency users to disclose their transactions on their 2019 individual tax returns.
• The cryptocurrency question on the 2020 return asks taxpayers if they received, sold, sent, exchanged or otherwise ...