Questions and Answers
True or false: Digital assets include only cryptocurrencies.
False
What can happen if your SSN is incorrect or missing on your tax forms?
You may be audited by the IRS
True or false: Digital assets are not subject to federal income tax.
False
How can you apply for an SSN?
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True or false: If you own a digital asset, you have a financial interest in it.
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How can you obtain Form SS-5?
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How long does it take to get an SSN once all evidence and information are submitted?
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True or false: Reporting of certain actions or transactions with digital assets is not required.
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True or false: Income from the sale of digital assets should be reported in the same way as other types of income.
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What should you do if your name or SSN on your social security card is incorrect?
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Study Notes
- Digital assets are digital representations of value recorded on a secure distributed ledger.
- Examples of digital assets include NFTs, cryptocurrencies, and stablecoins.
- Digital assets are treated as such for federal income tax purposes.
- Check "Yes" on Form 1040 or 1040-SR if you received, sold, exchanged, gifted, or disposed of a digital asset.
- You have a financial interest in a digital asset if you own it or have an ownership stake in an account that holds it.
- Certain actions or transactions with digital assets don't require checking "Yes."
- If you disposed of a digital asset held as a capital asset, use Form 8949 to calculate capital gain or loss and report it on Schedule D.
- If you received digital assets as compensation for services or sold them in a trade or business, report the income as you would other income of the same type.
- Answer "Yes" or "No" to the digital asset question on Form 1040 or 1040-SR.
- For more information, visit IRS.gov/virtualcurrencyfaqs.
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