VIRITUAL CURRENCY - INFORMATION REPORTING UDPATE
/The IRS has updated their FAQ for virtual currency. FAQ#5 now provides:
Q5. The 2020 Form 1040 asks whether at any time during 2020, I received, sold, sent, exchanged, or otherwise acquired any financial interest in any virtual currency. During 2020, I purchased virtual currency with real currency and had no other virtual currency transactions during the year. Must I answer yes to the Form 1040 question? (3/2/2021).
A5. No. If your only transactions involving virtual currency during 2020 were purchases of virtual currency with real currency, you are not required to answer yes to the Form 1040 question.1
Therefore, you do not need to report virtual currency if you only made a purchase with USD in 2020. However, sales would still need to be reported.
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