Question of the Day: What type of currency are taxpayers now required to disclose on their 2020 tax return?

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Jan 06, 2021
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Question of the Day, Taxes

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Basics of Bitcoin On Demand.

 

Answer: Cryptocurrencies

Questions: 

  • What do you know about cryptocurrencies (e.g. bitcoin)? 
  • Do you think that having the IRS now require disclosure of cryptocurrency holdings means that it is becoming more mainstream?
  • Bitcoin, a type of cryptocurrency, has risen from $8,000 to $37,000 over the past year. When you see an investment increase that much does it make you even more eager to buy it? Why or why not? 

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? Our Should You Buy Bitcoin EdPuzzle will serve as a terrific complement to this post.


Behind the numbers
(CNBC):

Indeed, the front page of the individual income tax return, aka Form 1040, asks a yes or no question: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

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About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.