The world of crypto is a new frontier for a host of government agencies — and the IRS is no exception.
Though changes are happening slowly, the agency’s trying to make sure that Americans who dabble in digital assets pay their fair share of taxes — while other regulatorsA new law is scheduled to go into effect in 2023 that will make tax filing for investors a bit easier, and cut down on scofflaws. Exchanges and brokerages will be required to report customer information directly to the IRS and to investors themselves .
This year, for the third time, it changed the language on the front page of a common tax form, the 1040. It now asks taxpayers if they've traded, bought or sold any "digital assets" in the past year — whereas the 2021 form used the term "digital currency." "I think they're trying to make sure NFTs and the like are covered," says Mark Luscombe, a tax analyst at Wolters Kluwer.Worth noting:They won't be able to write off the potential losses on their taxes until the bankruptcy process is over — and that could take years.Tax season for all kinds of investors might hurt a little more than usual this year — digital assets are no exception.