In case you haven’t noticed. . . the IRS has added a new question about income from digital assets to partnerships, corporations, S corporations, and estates and trusts for 2023 tax returns. Ask your entity client about digital currency transactions.

2023 Form 1065

For example, the 2023 Form 1065, Schedule B, question 30 asks: “At any time during this tax year, did the partnership (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or financial interest in a digital asset)? See instructions.”

Digital assets include (but are not limited to):

• Cryptocurrency and convertible virtual currency;
• Stablecoins; and
• Non-fungible tokens (NFTs).

IRS Free Webinar

The IRS announced that it will hold a free webinar on February 22 at 2pm EST for tax pros whose clients receive income through digital asset transactions.

During this free webinar, the IRS will cover:

• Identifying taxable events involving digital assets;
• Calculating income, gains and losses associated with digital asset transactions;
• Reporting income, gains and losses associated with taxable digital asset transactions for individuals filing Form 1040 and 1040-SR tax returns; and
• A live question and answer session.