, 2022-10-24 08:00:01,
Jose Luis Pelaez | Getty Images
The IRS is sharing more details on how to report digital assets for the 2022 tax filing year, according to draft instructions.
Since 2019, there’s been a yes or no “virtual currency” question on tax returns, requiring filers to check a box to disclose their taxable crypto activity. For 2022, the agency has changed the term “virtual currency” to “digital asset,” with more guidance on when to check “yes.”
Notably, “digital asset” now includes non-fungible tokens, or NFTs, which grant ownership to items like art, and stablecoins, which are pegged to a real-world asset.
More from Personal Finance:
How much you can earn and pay 0% capital gains taxes in 2023
IRS bumps up estate tax exclusion to $12.92 million for 2023
What 8.7% Social Security cost-of-living adjustment means for taxes on benefits
“I think that’s a good change,” said Matt Metras, an enrolled agent and cryptocurrency tax specialist at MDM Financial Services in Rochester, New York. “People who trade things like NFTs would not think of that as a virtual currency.”
The “broader language” may include new categories, such as taxpayers receiving digital assets from “play-to-earn games,” which have become popular over the past year, he said.
“The IRS is always going to be behind the eight ball because they…
To read the original article from news.google.com Click here